Conclusion

The existing evidence indicates that the incentive mechanism and the provision of technical assistance, implemented simultaneously, have had a greater impact on learning than they would have had if adopted separately. An important aspect of Ceará’s education model is the complementary impact of its various policy pillars (incentives, technical assistance, learning monitoring, the decentralization of education provision, and strong political leadership) on learning. World Bank research strongly suggests that implementing the full package has a greater impact on learning than implementing one pillar alone (Lautharte, Oliveira, and Loureiro, 2020). Comparing schools at the border between Ceará and neighboring states, Lautharte, Oliveira, and Loureiro (2020) have shown that when the incentive model with technical assistance was introduced in schools in Ceará, it produced an impact two to three times greater than that when the same schools had only RBF in place. These results hold for the performance of primary and lower secondary students on both the Portuguese and mathematics SAEB tests.

CONCLUSION

The experience of the Brazilian education finance framework shows that it is possible to substantially improve the regional equity of education spending. The main lessons from the Brazilian education finance system include:

• Pooling resources from distinct governmental levels to redistribute them according to a per capita rule with a minimum level of spending per student is an effective and transparent way of reducing inequalities in education spending, especially in systems with high regional inequality at the baseline. • Applying higher weights for disadvantaged students when redistributing funds can foster a more equitable expansion of education provision and enrollment. • Strengthening information systems, increasing transparency, and allowing direct bank transfers are key to eliminating political bargaining over intergovernmental transfers in education. • Replacing the earmarking of revenues for education expenditures with an exogenous minimum level of education spending per student that is compatible with the amount of total resources allocated to the education sector can effectively increase efficiency and equity.

The RBF mechanism implemented in the state of Ceará can teach us important lessons on how to substantially improve learning and other education outcomes by using resources rationally, especially in a context of fiscal constraint. The main lessons from the Ceará case are:

• There is a high level of complementarity between financial incentives and technical assistance. Creating well-designed incentives aimed at improving education outcomes in the absence of technical support can still improve average education outcomes, but some municipalities can become discouraged and lag behind, thus undermining the overall benefits of the policy. Conversely, providing high-quality technical support without strong and attractive incentives for improvement can yield some gains, particularly in municipalities with limited capacity and poor education outcomes. However,