This document provides an overview of the way MCC conducts due diligence on compact proposals that focus on or include one or more aspects of education.
Investing in people through improving their education is an essential contributor to sustained economic growth. Recognizing this, MCC’s country selection criteria include a number of education indicators that reflect a country’s commitment to supporting education. MCC expects proposals for MCA funding to emphasize interventions that support economic growth, enhance productivity, and enhance gender equality, particularly for the poor.
As such, MCC encourages countries to think not only of education sector reform or systems strengthening activities, but of strategic efforts which can contribute to economic growth and poverty reduction. For instance, a high quality workforce may be essential to enhancing productivity, access to markets, or technology diffusion and innovation associated with specific growth sectors. Major infrastructure investments may rely on targeted human resource development efforts for better management and sustainability. An education intervention may contribute to food security, improved health status, community development, and other livelihoods enhancement activities in a region.
MCC believes systematic exclusion of women from access to skills and the labor force leads to inefficient allocation of labor, lost productivity, and thus diminished progress of economic development. A woman’s health status, participation in the formal sector, lifetime earnings, reproductive choices, her children’s well-being and her household’s poverty levels are all impacted by a woman’s access to skills. The benefits of female education transmit across generations and to their communities. Thus, MCC stresses that proposed programs demonstrate how they will promote gender equality in education.
MCC also considers skill competency as a fundamental objective of any schooling or skills development effort. Interventions to improve participation in schooling should be balanced with efforts to improve the quality of learning content, the learning environment, service delivery, facilities and systems. Where possible, MCC-funded investments should add value to other donor-funded investments in quality improvement.
Finally, MCC encourages engagement of diverse stakeholders, public-private partnerships and innovation. Countries are encouraged to consider how new financing mechanisms, civil society participation, and for-profit sector involvement can maximize impact and ensure sustainability beyond the Compact.
Depending on the specific country conditions or desire to complement other Compact projects, elements of an education project might include one or a combination of the following:
- Improving national education systems, to include any or all levels of education, and their links with economic and social priorities
- Functional literacy, numeracy and life skills within the context of agricultural, water and sanitation, micro-credit, property rights and other economic or community development activities
- Improvement or expansion of continuing or professional education to address critical workforce upgrading needs
- Targeted job training to enhance prospects for out-of-school or unemployed youth and adults (if necessary, as part of a larger labor market program)
- Linking primary and secondary education to health and nutrition services
- Curriculum revision (e.g. including focus on work readiness, life skills, gender sensitivity, skills in demand by labor market, entrepreneurial skills, competency-based approaches)
- Revision of teaching-learning materials (textbooks, teacher guides, other aids)
- Improving teacher training, recruitment and/or deployment
- Scholarships or vouchers for disadvantaged
- School supplies/uniforms for disadvantaged
- Raising awareness and engagement by communities to improve educational opportunities and outcomes
- Encouragement of girls and boys towards science, math and technology
- Building or renovating schools/libraries/community resource centers to include student-friendly and safe facilities
- Modernization of school laboratories or workshops
- Local transportation systems to increase access
- Expansion or updating of apprenticeship programs
- Certification and examination system development/improvement
- Job placement or counseling programs
- Open/distance learning
- Strengthening institutional capacity (procurement, service provision, performance management systems, EMIS, supervisory/management training, administration, etc.)
- Twinning relationships
- Study tours to examine practical applications
In general terms, due diligence can begin once all the required components of a Concept Paper have been received. A strong proposal will respond directly to the Constraints Analysis and include the following elements:
- thorough description of the physical, social and economic dimensions of the problem, including how the government has tried to address the problem;
- country (or comparable) studies or data on economic returns for the specified interventions;
- relevant/available country data on demand and supply side of market for education/skills development (including labor market information, if available);
- regulatory, policy or legislative changes required, including steps necessary to secure these changes;
- accordance with MCC’s Guidance: Environmental Guidance, Gender Policy, Economic and Beneficiary Analysis
- potential beneficiaries and selection process used, including sex-disaggregated data
- benefits and how they will differ across gender and social groups
- as appropriate, growth diagnostics related to supply of skilled human resources;
- initial cost-benefit analysis;
- risk analysis on all proposed investments;
- criteria and process that would be used to select institutions for intervention;
- performance data on institutions or systems (e.g. learning outcomes, employment tracer study results, impact evaluation results from past projects);
- past and potential roles for private stakeholders in improving efficiency, equity, quality and maximizing impacts of public expenditure;
- potential demand-side and supply-side financing strategies to ensure the project’s long-term sustainability; including opportunities for results-based financing; and
- opportunities to leverage or complement other donor interventions to the sector/sub-sector.
Due Diligence Questions
Following acceptance of the Concept Paper, MCC’s Human Development Division will begin due diligence on the proposed investments. Below are examples of questions which have been pursued during the due diligence phase. A strong Concept Paper will have taken these types of issues into consideration:
- Does the project design clearly identify economic and social benefits from the proposed project? How will economic gains be apportioned among project beneficiaries?
- Have stakeholder analysis and adequate consultation been undertaken?
- Will the proposed activity strengthen coverage and access for the poor?
- Have both supply side and demand side constraints to project achievement been assessed?
- Have gender and other social concerns been integrated into project objectives and activities? (e.g. constraints of access, schedules, needs)
- For programs (excepting primary and secondary education), what is the public funding rationale – i.e., are there market failures that necessitate government intervention and funding?
- How will any proposed pilot projects or impact evaluations relate to or contribute to state of the art knowledge in education/training?
Infrastructure and Equipping of Facilities (see infrastructure section for large scale civil works)
- What is the current facility inventory, and what is the basis for the expansion of existing and the establishment of new facilities?
- What is the labor market justification and/or local demand for investing in this/a new institution?
- How was the site selected? Will it improve access for disadvantaged populations?
- What are historic subscription rates for selected institutions?
- What is the quality of existing and potential staff in the facilities?
- Are facilities child-friendly and safe?
- Do selected institutions have recent capital and operating budgets and annual reports available summarizing sources of financing, resources used, services delivered, results achieved (e.g., learning outcomes, graduate placement), partnerships to support employability and access to enterprise support for graduates?
Curriculum Revision, Assessment/Examination, Instructional Materials
- In what curriculum areas has the (Syllabus, Qualifications Framework, etc.) been developed? Was it benchmarked against others in the region? How is content review managed (updating of content, exams)?
- What type of labor market studies/analyses have been done, to inform skills development needs? To what degree did the private sector provide input?
- To what degree is work readiness, gender equity, gender-based violence, health issues (e.g. HIV/AIDs, nutrition), life skills, occupational safety, etc. already covered in curricula?
- How is development, revision and distribution of instructional materials handled? Is it managed efficiently?
- What inter-ministerial cooperation exists to support skills development?
Teacher/Faculty/Service Provider Training
- Do teachers receive training in both skills/content and pedagogy?
- What are the current teacher qualification requirements?
- Is there a shortage of qualified, skilled teachers in the needed areas? How does the proposal address the shortage if there is one?
- What are retention rates? What type of incentive schemes have been attempted/are in place/are planned or proposed to recruit and retain staff?
- What is impact of HIV/AIDS and other disease on the profession?
- How are unions likely to impact the success of the specific educational activity?
- How is performance monitored? What range of in-service support is provided? What is its primary focus?
- Once training programs are place, what mechanisms exist for ensuring their relevancy?
Improving Access and Non-Formal Education
- What may be potential obstacles to participation? (geographic, social, gender, logistical, etc.) How do these affect delivery strategies?
- What past efforts have been made to enhance access/interest/participation of the target group?
- What routes are available for school leavers and school dropouts to improve their employability?
- Is there mobility between the non-formal and formal system?
- How are skills gained in the non-formal system evaluated and recognized?
- What is the role of various Ministries in non-formal education?
Policy and Legal Frameworks
- To what extent will fiscal, legal or administrative policies constrain project success? Have these constraints been mitigated or will they be changed through project activities?
- How does regulation and enforcement of standards currently operate?
- What is role of private industry in governance (e.g. post-secondary education)?
Institutional & Organizational Arrangement
- Are project governance and implementing structures clearly defined? Have institutional capacities been assessed and constraints mitigated?
- Are there necessary construction and operational resources available in the country or region, or how can they be brought to bear?
- To what extent are other donors engaged in related activities? How will coordination be ensured?
- How does this relate to on-going or planned related activities by US Government agencies or organizations?
Private Sector Engagement
- What is the current role (if any) of the private sector in the system?
- Do the interventions leverage the private sector to implement commercially viable solutions to identified market constraints? (knowledge, assets, co-financing)?
- Does the system have a public-private partnership policy and guidelines? Are there policy/regulatory/legal/other obstacles to private sector participation?
Co-Financing and Financial Sustainability
- How is training financed?
- How will the schools/institutes fund O&M, staff, scholarships, curriculum, etc. beyond the life of MCA funding?
- Will the proposed solution require cost-sharing from users? If so, do the targeted users have the ability to pay? Are there appropriate sources of funding for such cost-sharing requirements?
- Are subsidy programs limited and justified as a necessary public intervention? Does the proposal follow ‘best practices’ in this regard?
- Are there alternatives (e.g., loan programs) that could have higher impacts or lower costs (or both)?
- What factors assure financial sustainability? If none, is there a clear exit strategy upon termination of funding? Does the project initiate a flow of benefits to be reliably accrued throughout the term used to calculate the ERR?