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Building Equitable Costing Models
Several speakers made presentations on the challenges of building costing models given the complexity of the early childhood development space. They raised such issues as multiple inputs, outputs, stakeholders, and mechanisms, which complicate the issue, while lack of transparency makes it difficult to determine how much programs cost and how much is currently being spent. Speakers raised several questions around priorities for funding, ensuring value, determining cost-effectiveness, and creating best practices for both assessing costs and guaranteeing that funding reaches its recipients.
HOW TO BUILD COSTING MODELS ON THE PRINCIPLE OF EQUITY FOR CHILDREN AND FAMILIES1
Tamar Atinc of the Brookings Institution opened the session by reiterating that gaps exist in funding early childhood development programs and services. There are little data on how much services should and do cost, what it would actually take to provide such services to children, and how much countries are currently spending. Atinc offered three reasons why better information on expenditure is necessary:
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1 This section summarizes information presented by Tamar Atinc, the Brookings Institution.
- Transparency: To have informed conversation around public spending, there needs to be information on how much is being spent on children versus other groups in society.
- Expansion: Many countries need to expand services for young children, and all countries need to improve the quality of these services. Atinc asked, what will it cost to expand and upgrade services to a specific standard? These changes require a level of granularity on costing information that is currently inadequate.
- Fiscal data systems and management: To establish per capita funding that takes into account the diversity of a population in federal systems with multiple layers of budgeting, specific costs need to be enumerated.
WHAT IS THE COST OF INVESTING IN YOUNG CHILDREN IN INDIA?2
Anit Mukherjee of the Center for Global Development explored in further detail the funding flows and per capita costs of investing in young children in India. He described a survey he undertook—“PAISA: Planning Allocations, Expenditures and Institutions: Studies in Accountability”—to determine whether funds allocated for elementary schools were reaching their recipients. In one particular location, he discovered that not only had the funds not reached the school but that enrollment had fallen, leading to the disuse of one of the classrooms. Instead, the classroom was taken over by the ICDS to be used as an Anganwadi center. In another location, he discovered a dilapidated building being used as an early childhood development center. Per the mechanisms set in place to fund early childhood development, both centers should have been robust centers of activity, encompassing various components to support children’s development, such as nutrition, care, and education. However, in practice, they were serving as little more than feeding centers, mainly because appropriate funding was not in place. While in theory all the elements of the investment cycle were in place, according to Mukherjee, the process was not working. He reiterated what other speakers had also noted—that child development outcomes were not being fully achieved.
Taking a life cycle investment perspective, Mukherjee noted that investments in young children are very difficult to cost because there are many inputs, outputs, mechanisms, and outcomes to consider, in addition to the various stakeholder groups. Within the ICDS, designed to coordinate all components of supporting child development, unit costs are
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2 This section summarizes the information presented by Anit Mukherjee, Center for Global Development.
broken out by four main programs: supplementary nutrition; preschool education; care and nutritional counseling; and health services. In addition, Mukherjee indicated there are fixed costs, such as for infrastructure and salaries. But although a large amount of funds are allocated for young children, much of that funding is tied up in bottlenecks, never reaching its intended recipients. Mukherjee pointed out that for several years, only 50 percent of federal funds that were allocated for the ICDS were disbursed, and within the past couple of years, that number has increased to only 70 percent (Accountability Initiative, 2014). In examining why, he noted that bureaucracy ties up funding because it often falls to already overburdened staff to complete the necessary paperwork.
Because investments in young children cross multiple departments, Mukherjee noted that inefficiencies are often built into the system. The use of a common delivery platform, a theme raised a few times during the workshop, could help reduce these inefficiencies. Using the child as the central focus of the platform could help converge interests and funds.
During the concurrent breakout sessions that occurred during the second day of the workshop, discussants from the breakout session on designing costing models raised questions around what should be considered in a cost-effectiveness analysis: should one consider outcomes, inputs, programs, policies, projects, scaling up, cost efficiency, or something else? Several participants thought that setting this goal would help guide the analysis. Some possible goals discussed included the following:
- Determining what competencies in children that programs should aim to develop;
- Assessing parent and caregivers needs, particularly in the birth-to-age-3 range;
- Addressing different learning needs and different learning capacities of children, particularly those who might require greater investment;
- Setting minimum standards for both outcomes and service provision; and
- Quantifying outcomes.
Group discussants also raised the question of determining who the audience is—who would benefit from having a costing model? Some participants also raised the concern that a costing model is only as useful
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3 This section summarizes individual remarks by participants in concurrent session 2.
as affordability. One participant expounded that if funds are scarce, then determining the cost of programs or outcomes still cannot address the lack of investment. At the same time, where funds are available, another participant indicated it takes only 20 years or so to determine whether the model is a useful one.
In the discussion following the reporting back, audience participants raised additional points. In building a costing model, one participant noted, several categories of costs could be enumerated, including types of populations to be targeted, human resources, supplies, administration, supervision, training and capacity building, advocacy, infrastructure, repairs and maintenance, communication, operations, monitoring and evaluation, travel, and others. Some participants also asserted that boundaries should be created to determine which costs should be included because it is possible to cost inaction, opportunity costs, future costs, and other indirect costs and externalities that are not specific program or intervention costs. In addition, another participant mentioned some costs are not always shown, such as the cost of leakage or waste. Finally, one participant noted that policy makers do not tend to care about big picture costs, but rather their attention is focused on short-term costs and marginal gains. He also emphasized that attention to cost–benefit ratios, particularly in showing that there is high marginal gain even where there might be high marginal investment, is essential in convincing policy makers to fund interventions.
