A Review of Demand-Side Financing Initiatives in Education

In the last few years, some very important demand-side financing initiatives in education have been implemented in a number of countries, including Progresa in Mexico and Bolsa Escola in Brazil, resulting in a number of evaluation reports. There has been considerable attention devoted to demand-side financing in the literature and the popular press. Approaches that allocate financial incentives to families in order for their families to attend school and programs that channel public funds for education through the beneficiary and their family are seen by many as more efficient uses of resources and far more effective at improving education outcomes than most supply-side interventions. The available evidence on the impact of – and/or experience implementing – demand-side financing interventions is reviewed. It is tentatively concluded that demand-side financing programs have improved educational indicators and outcomes. In most cases, they led to higher school attendance rates and lower school dropout rates. Evaluation results indicate that these program have led to significant reduction in both school dropout and repetition rates.