In 2011, USAID issued a new four-year education strategy to ensure that investments are coordinated to achieve measurable and sustainable educational outcomes. To this end, USAID selected three strategic goals:
• Goal 1: Improved reading skills for 100 million children in primary grades by 2015;
• Goal 2: Improved ability of tertiary and workforce development programs to produce a workforce with relevant skills to support country development goals by 2015; and
• Goal 3: Increased equitable access to education in crisis and conflict environments for 15 million learners by 2015.
Reaching the first goal will require the optimization of educational resources—finance, teachers, school management—and the use of institutional and personal incentives that will motivate education practitioners to improve their commitment and performance. The objective of this review is to learn from the successes and failures of implementing incentive and accountability mechanisms in education worldwide, in order to draw lessons that can be applied specifically to developing countries. The approach to the review is simple: to examine some recurrent threads or themes that suggest successful approaches and to typify to any extent possible the circumstances under which incentives and accountability succeed or fail.
A growing literature documents the effects of providing incentives in schools. These incentives can target teachers, school principals, and other administrators, as well as students and their parents. Inversely, these incentives become mechanisms for school and teacher accountability, since they require the measurement and reporting of learning outcomes and school performance. This report reviews the recent literature on incentives and accountability in education with the purpose of assisting practitioners and stakeholders with a frame of reference for operational use.
Mimicking market forces, incentives are used as prizes for improving performance above the existing threshold under the simple notion that school structures are not motivating enough for teachers, students, or parents to automatically increase their dedication and improve student learning. How well incentives improve learning depends on the mechanism itself, the institutional and cultural framework, the ways in which performance is measured and reported, and the willingness of stakeholders to apply rewards and sanctions.