Education Funding Alone Fails to Boost Student Performance, Romania Finds

A World Bank-backed study of Romania's €200 million ROSE education program found that school grants averaging €100,000 per school did not significantly improve student retention, graduation rates, or national exam performance among disadvantaged students. The findings suggest that funding alone is insufficient, highlighting the need for evidence-based teaching interventions, stronger implementation, and outcome-focused education reforms.

A major education reform program in Romania has delivered an important message for policymakers and development partners: more funding for schools does not automatically lead to better student outcomes.

A new study by researchers from the Inter-American Development Bank, Université du Québec à Montréal, and Columbia University evaluated the Romania Secondary Education Project (ROSE), a €200 million initiative supported by the World Bank and implemented by Romania's Ministry of Education. The project aimed to improve graduation rates, reduce dropouts, and boost performance in the national Baccalaureate examination among disadvantaged students.

The findings are likely to attract attention from governments, development agencies, and private-sector education providers worldwide as they seek effective ways to improve learning outcomes and build human capital.

Large Investment, Limited Academic Gains

The ROSE project targeted more than 1,160 low-performing public high schools across Romania, with 874 schools participating. Schools received grants averaging about €100,000, or roughly €159 per student, to finance tutoring, remedial classes, counselling, extracurricular activities, and minor infrastructure upgrades.

Researchers analyzed outcomes for 41,524 students across 165 schools using a randomized rollout design, making it one of the most rigorous evaluations of education conducted in Romania.

Despite the scale of the investment, the study found no significant impact on student retention, graduation rates, Baccalaureate exam participation, pass rates, or exam scores. Students in schools that received the grants performed no better than those in comparison schools.

The researchers also found no meaningful differences based on grant size, school location, student achievement levels, or local economic conditions.

What the Findings Mean for Policymakers

For governments facing budget constraints, the findings highlight the need to focus on how money is spent rather than simply increasing funding levels.

The study suggests that school grants alone may not overcome deeper challenges such as weak teaching quality, curriculum gaps, low student motivation, or socioeconomic barriers. While schools were given flexibility to design their own interventions, many activities may not have directly addressed learning outcomes.

The results reinforce growing international evidence that education spending delivers the strongest results when linked to proven teaching practices, targeted academic support, and strong accountability systems.

Important Lessons for Development Partners

The findings are equally relevant for international development institutions, including the World Bank, regional development banks, donor agencies, and education foundations.

Implementation challenges appear to have reduced the program's effectiveness. Although schools were expected to receive their full grants upfront, funds were often released in stages. By mid-2020, only 57.6 percent of allocated funding for first-round schools had actually been disbursed.

This highlights the importance of implementation quality, monitoring systems, and timely fund delivery. Development partners may need to place greater emphasis on measuring outcomes rather than tracking spending or activity completion.

Opportunities and Risks for the Private Sector

The study also carries implications for education technology firms, training providers, and impact investors.

The lack of measurable learning gains suggests growing demand for solutions that can demonstrate clear results. Companies offering digital learning platforms, teacher training programs, personalized tutoring services, learning analytics, and outcome-based education models may find new opportunities to work with governments and development agencies.

At the same time, the findings serve as a warning that investments in education can fail to generate returns if interventions are not closely linked to student learning. Private-sector partners will increasingly be expected to prove their effectiveness through measurable outcomes.

The Way Forward

While the program did not improve academic performance, it produced some positive signs. Students reported higher motivation and confidence, teachers noted stronger engagement with learners, and school leaders said the grants improved management capacity.

The study also found that girls' Baccalaureate pass rates increased by about three percentage points, suggesting that targeted interventions may benefit specific groups of students.

The researchers recommend that future programs focus more closely on evidence-based teaching interventions, strengthen implementation support, improve monitoring and evaluation systems, and sustain support over longer periods. Educational improvements often take years to appear, especially among disadvantaged students.

For policymakers, development partners, and investors, the Romanian experience offers a valuable lesson: funding remains important, but lasting improvements in education require strategic investments, strong implementation, and a clear focus on learning outcomes. As countries continue investing billions of dollars in human capital development, the findings provide a timely reminder that the ultimate goal is not spending more, but achieving better results for students.