Unanticipated Input Shocks
Standard evaluations assume public funding interventions operate in static environments, but the timing and predictability of grant arrivals dictate whether agents can adjust expenditure behavior before the intervention occurs. When resources arrive unexpectedly, households lack the opportunity to reallocate private funds prior to spending.
Picture this
When an educational grant arrives unexpectedly after households have already completed their major annual purchases (e.g., at the start of the school year), families cannot easily return or resell their bought items. This locks in the private spending, causing the full public grant to act as an additive increase in learning resources rather than replacing existing spending.
What the evidence says
Unanticipated Year 1 grants increased combined student test scores by 0.085 SD (0.09 SD in math, p < 0.05; 0.08 SD in language, p < 0.05) with zero significant reduction in household private spending (-0.041 log expenditure change, p > 0.10).
- Who
- 200 primary schools in rural Andhra Pradesh, India (~27,704 student test observations in Year 1).
- How
- Randomized controlled trial with surprise grant disbursal (~$3 per pupil) announced two months into the school year.
What to do
Deploy emergency or non-recurrent school improvement grants as unexpected one-time allocations to prevent private expenditure reductions during early implementation phases.
From the source
"Evidence from India and Zambia shows that student test scores are higher when schools receive unanticipated grants, but there is no impact of grants that are anticipated."
School Inputs, Household Substitution, and Test Scores