118 APPENDIX Without the government budget constratint, the necessary condition is Lagrangian multiplier. From this we also know that when qi benevolent government’s unitary decision.


So, without government intervention, LERs are determined by school-level liquidity (budget) constraints, provided that the best ratio is identical in all schools no matter to which racial group they belong. However, we expect that with active government interventions, the ratios will be equalized across all schools. In particular, the subsidy is allocated more to those schools in less favorable socioeconomic circumstances, that is, those with larger initial LERs.


The 1998 Norms and Standards for School Funding Sections that are relevant to this monograph are the following:


45. The SASA [South African School Act] imposes a responsibility on all public school governing bodies to do their utmost to improve the quality of education in their schools by raising additional resources to supplement those which the state provides from public funds (section 36). All parents, but particularly those who are less poor or who have good incomes, are thereby encouraged to increase their own direct financial and other contributions to the quality of their children’s education in public schools. The act does not interfere unreasonably with parents’ discretion under the law as to how to spend their own resources on their children’s education.


46. Ironically, given the emphasis on redress and equity, the funding provisions of the Act appear to have worked thus far to the advantage of public schools patronized by middle-class and wealthy parents. The apartheid regime favored such communities with high-quality facili- ties, equipment and resources. Vigorous fund-raising by parent bod- ies, including commercial sponsorships and fee income, have enabled many such schools to add to their facilities, equipment and learning resources, and expand their range of cultural and sporting activities. Since 1995, when such schools have been required to down-size their


who cannot pay school fees are often required to provide services to the schools, such as clean- ing the school facilities, but there is no systematic evidence suggesting that this is the norm in the country.


In the empirical analysis, since we look only at the relationship between changes in number of learners and educators, we do not directly examine the effect of school fees.


gi* = wy* – qi ——(f). In general we have 2[y* – φi(gi)][–φ′(gi)] = λ, where λ is the ——(f) decreases,


gi increases to compensate for gaps in the capability of collecting school fees (community endowment). In other words, LERs are equalized under the


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