This paper was published by the American Economic Review.
This paper reports on a project designed to provide experimental evidence on several questions regarding resource allocation in primary education: the impact of pupil-teacher ratios, tracking, and the institutional environment (teacher contracts and beneficiary control). The project involved 210 primary schools in Western Kenya. We find that in this context, reducing the pupil-teacher ratio (from 80 to 46 on average), in the absence of any other reform, lead to reduced teacher effort, and to small and insignificant increases in test scores. In contrast, combining class size reduction with improved incentives (either by hiring local teachers on short term contract or by increasing parental oversight) leads to significantly larger test score increases. Finally, combining class size reduction with tracking by initial achievement leads to large test score increases, regardless of a child’s initial achievement, suggesting that students benefits from homogenous classes. In contrast, we find no evidence that test scores are affected by the average pretest score of their peers.