School based management effects: Resources or governance change? Evidence from Mexico

• School based management (SBM) reforms provide cash grants directly to school councils who decide on best use of the grant.
• We study the effects of PEC-FIDE, an SBM program in Mexico, on student outcomes.
• SBM significantly improves Spanish test scores for 3rd grade students. We do not find significant results on any other student outcomes.
• The effects of the program are likely to be the result of added financial resources.
• Longer-term governance change at the school level might require additional investments in capacity building, including parent training.

In their struggle to improve student learning, many developing countries are introducing school-based management (SBM) reforms that provide cash-grants to school councils. School councils are expected to work collaboratively and decide on the best use of the funds. In this paper, we study the effects of one such program in Mexico on student outcomes. We complement the differences-in-differences analysis by qualitatively exploring program implementation. Results suggest the program had substantial positive effects on third grade Spanish test scores, with most benefits accruing to schools receiving SBM cash grants for the first time. These results are robust to alternative model specifications. The implementation analysis suggests school councils did monitor grant use, but parental participation did not significantly improve in other areas. Our findings suggest that the observed positive program effects are likely to be the result of providing schools with financial resources to meet pressing equipment, material, and infrastructure needs.