o In Latin America, as in many of the developing regions of the world, efforts to encourage school autonomy and/or community participation are aimed at making schools more productive. These efforts have taken numerous forms, including downsizing the central educational bureaucracy and modifying its functions, moving authority and responsibility to local levels of government, introducing school-based management and community-based school financing, initiating performance-based financing schemes, deregulating the choice of school books and materials, and expanding school choice through vouchers, charter schools, or open enrollment programs.
o In this study, we abstract from the particular mechanism used to affect decentralization. We concentrate instead on the degree to which two types of local authority are employed to run the school. The first, school autonomy, is taken as the power accorded the local school administration to make school- management decisions. The second, community participation, is taken as the power accorded the local parents and/or community members to affect those same decisions.
There are substantial differences across countries in how decisions are made regarding teacher hiring, evaluation, and compensation. In Argentina and Peru, hiring promotion and salary decisions are made at the state or provincial level, while in Bolivia and the Dominican Republic, it is the national authorities that manage personnel matters.
o The contribution of this study is to formally confront the decision by the local authority of whether or not to exercise control over the school. Rather than presuming the local school managerial effort is determined exclusively by legislative fiat, we assume that the local authority can choose how much effort to exert in running the school. As a consequence, the exertion of local authority must be treated as an endogenous variable and estimates that treat the exercise of local authority as exogenous will be biased.