The Effect of Nonpersonnel Resources on Educational Outcomes: Evidence from South Africa

Little credible evidence exists on the effect of nonpersonnel school expenditures on educational outcomes in developing countries. This paper studies the impact of nonpersonnel funding on school outcomes exploiting the peculiar way in which these resources are allocated in South Africa. Government funding follows quintiles constructed on the basis of school poverty scores. This creates discrete jumps in the allocation of funding, and we use a regression discontinuity approach to analyze its effects on school outcomes at the end of high school. Our results show a small but positive effect of resources on student throughput during the last years of high school and on the number of students writing the matriculation exam. However, additional resources do not translate into a higher number of successful exams, leading to an overall negative effect on pass rates. We suggest that these findings may have to do with schools reacting to the per-pupil nature of funding.