The Fiscal Cost of Weak Governance: Evidence from Teacher Absence in India

45 Pages Posted: 20 Apr 2016

See all articles by Karthik Muralidharan

Karthik Muralidharan

University of California, San Diego (UCSD)

Jishnu Das

Georgetown University; Georgetown University

Alaka Holla

World Bank; Brown University; Innovations for Poverty Action

Aakash Mohpal

University of Michigan at Ann Arbor

Multiple version iconThere are 2 versions of this paper

Date Written: February 25, 2016


The relative return to input-augmentation versus inefficiency-reduction strategies for improving education system performance is a key open question for education policy in low-income countries. Using a new nationally-representative panel dataset of schools across 1297 villages in India, this paper shows that the large investments over the past decade have led to substantial improvements in input-based measures of school quality, but only a modest reduction in inefficiency as measured by teacher absence. In the data, 23.6 percent of teachers were absent during unannounced visits with an associated fiscal cost of $1.5 billion/year. There are two robust correlations in the nationally-representative panel data that corroborate findings from smaller-scale experiments. First, reductions in student-teacher ratios are correlated with increased teacher absence. Second, increases in the frequency of school monitoring are strongly correlated with lower teacher absence. Simulations using these results suggest that investing in better governance by increasing the frequency of monitoring could be over ten times more cost effective at increasing teacher-student contact time (net of teacher absence) than hiring more teachers. Thus, at current margins, policies that decrease the inefficiency of public spending in India are likely to yield substantially higher returns than those that augment inputs.

Keywords: Educational Institutions & Facilities, Effective Schools and Teachers, Educational Sciences

Suggested Citation

Muralidharan, Karthik and Das, Jishnu and Holla, Alaka and Mohpal, Aakash, The Fiscal Cost of Weak Governance: Evidence from Teacher Absence in India (February 25, 2016). World Bank Policy Research Working Paper No. 7579, Available at SSRN:

Karthik Muralidharan (Contact Author)

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Jishnu Das

Georgetown University ( email )

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Alaka Holla

World Bank ( email )

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Aakash Mohpal

University of Michigan at Ann Arbor ( email )

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