Does Local School Control Raise Student Outcomes?: Theory and Evidence on the Roles of School Autonomy and Community Participation

School autonomy and parental participation have been frequently proposed as ways of making schools more productive. Less clear is how governments can foster decentralized decision-making by local schools. This paper shows that across eight Latin-American countries, most of the variation in local control over school decisions exists within and not between countries. That implies that the exercise of local authority to manage schools is largely a local choice only modestly influenced by constitutional stipulations regarding jurisdiction over school personnel, curriculum and facilities. As a consequence, estimated impacts of local school autonomy, parental participation or school supplies on student performance must account for the endogeneity of local efforts to manage schools. Empirical tests confirm that local managerial effort by the principal and the parents and the adequacy of school supplies are strongly influenced by parental human capital and the size and remoteness of the community, and that these effects are only partially moderated by central policies regarding the locus of control over the schools. Correcting for endogeneity, parental participation and adequacy school supplies have strong positive effects on 4th grade test performance, but school autonomy has no discernable impact on school outcomes.