Unequal funding for equal opportunities: Equity grants levelled Ethiopia’s educational playing field, study finds
Educational top-up funding for some of Ethiopia’s most disadvantaged schools may have helped to narrow the country’s regional learning gap by up to two-thirds, a study has found.
The findings, published in Education Economics, provide rare evidence that equity-based funding – that disproportionately targets schools and students in low-income and marginalised communities – does more to reduce educational inequalities than flat, system-wide spending.
Academics at the Universities of Addis Ababa and Cambridge researched the “Additional School Grant for Emerging Regions”: an initiative launched in 2018/19 to inject extra funds into government schools in Ethiopia’s historically disadvantaged ‘emerging’ regions.
They found that between 2018/19 and 2021/22, these grants were associated with a narrowing of the learning gap between students in ‘emerging’ regions and their peers in comparatively wealthier, ‘established’ regions by as much as 65%.
The researchers stress that this result should be treated cautiously. Roughly half the relative progress may reflect learning losses in established regions associated with COVID-19 school closures, which schools in emerging regions did not experience.
Even more conservative modelling, however, suggested that targeted funding was associated with a meaningful narrowing of educational inequalities. The finding reinforces longstanding arguments by bodies like UNESCO, that to level the educational playing field in low- and middle-income countries, governments should focus resources on those in greatest need.
"The gains... were largest among rural children and those from the poorest households, exactly the children the grant was meant to reach."
Dr Mesele Araya, from Addis Ababa University, said: “The gains we measured weren’t spread evenly - they were largest among rural children and those from the poorest households, exactly the children the grant was meant to reach. That’s what we call a double equity dividend: narrowing gaps both between regions and between richer and poorer children within them.”
Professor Ricardo Sabates, Professor of Education and International Development at the University of Cambridge, said: “People often question whether investing in education in lower-income countries really makes a difference, given that in many cases learning outcomes seem stubbornly poor. This study suggests that it can, if it goes to the schools where children are at greatest risk of falling behind.”
While school enrolment in Ethiopia has expanded dramatically in recent years, learning quality has lagged behind. Students in established regions, such as Addis Ababa, Amhara, Oromia and SNNP, regularly outperform their peers in emerging regions like Benishangul-Gumuz and Somali, where schools tend to suffer from infrastructure challenges, limited resources, and a shortage of qualified teachers.
The study focused on one component of Ethiopia’s General Education Quality Improvement Program for Equity (GEQIP-E): a top-up of 5% for schools in emerging regions, over and above a basic grant that goes to all government schools. Schools were encouraged to spend this ‘Additional School Grant for Emerging Regions’ on teaching and learning activities, school leadership, community participation, and physical improvements.
Despite long-standing theoretical support for equity-based funding, real-world evidence of its effectiveness remains scarce, especially in regions like sub-Saharan Africa, where structural disadvantages in the education system run deep.
The grant offered a unique opportunity to evaluate the approach. Because it supplemented universal funding, the researchers were able to run a “difference-in-differences” analysis, comparing the change in children’s learning gains in emerging regions, pre- and post-reform, with the same trends in established regions.
The study used the scores from mathematics tests taken by Grade 4 students at the start and end of three school years: 2018/19, 2020/21 and 2021/22. Researchers analysed data from 7,841 students from six regions, both established and emerging.
The baseline figures revealed a stark regional divide. Measured on a standardised scale, where 0 represented an average performance, the average end-of-year test score in emerging regions in 2018 was -0.679, compared with 0.027 in established regions. This equated to a learning gap of 0.71 standard deviations: an enormous deficit. Typically, an intervention that changes learning by 0.2 standard deviations is considered to have a “large” effect in education research.
The gap closed significantly after the top-up was introduced, however. The study estimates that, relative to the gap recorded in 2018, it narrowed by about 0.42 standard deviations (around 60%) in 2021 and 0.46 standard deviations (around 65%) in 2022.
"Our findings offer strong justification for retaining and reinforcing targeted funding for disadvantaged regions in future reforms."
A reduction of this size is exceptionally large and the overall figure was probably influenced by learning losses in established regions during the COVID-19 closures. The top-up was also delivered alongside wider equity measures and non-governmental organisation support. For these reasons, the researchers treat their headline estimates as an upper bound on what the top-up achieved.
Even setting aside the decline in established regions, scores in emerging-region schools rose by around 0.22 to 0.25 standard deviations compared with 2018. And under the study’s most conservative model, which accounted for broader, underlying trends in each region, the estimated gains remained substantial (0.29 to 0.42 standard deviations). Crucially, the biggest improvements were also concentrated among children in rural areas and those from the poorest households.
The study did not reach a firm conclusion on why this was the case, but the new paper points to how the money was used. Emerging-region schools invested relatively more in school leadership and community engagement, and these inputs – along with teachers’ subject knowledge and school facilities – were strongly linked to learning gains in emerging regions.
Practical barriers to closing the learning gap nonetheless remain. In the 2022 survey round, only 27.4% of emerging-region schools reported receiving the full top-up or more, most commonly because of funding shortages at district (woreda) level.
Ethiopia has since launched a new reform programme (the Ethiopia Education Transformation Operation for Learning, 2025–2029), which has a similar equity focus. “The transition to a new programme makes it very important to understand what the additional grant achieved and why,” Araya said. “Our findings offer strong justification for retaining and reinforcing targeted funding for disadvantaged regions in future reforms.”
Images in this story:
Primary School Classroom, Ethiopia by Eskinder Debebe / UN Photo, licensed under CC BY-NC-ND 2.0.
Additional image by UNICEF Ethiopia, licensed under CC BY-NC-ND 2.0.