The Appraisal of Investments in Educational Facilities - Eric - U.S.

230 Pages·2012·2.4 MB·English

DOCUMENT RESUME
ED 439 593
EF 005 682
TITLE
The Appraisal of Investments in Educational Facilities.
INSTITUTION
Organisation for Economic Cooperation and Development, Paris
(France). Programme on Educational Building.
SPONS AGENCY
European Investment Bank, Luxembourg.
REPORT NO
OECD-50647-2000
ISBN-92-64-17036-7
ISBN
PUB DATE
2000-00-00
NOTE
229p.; Based on a conference on the evaluation of investment
sponsored by the OECDPEB in collaboration with the Projects
Directorate of the European Investment Bank (Luxembourg,
November 16-17, 1998).
AVAILABLE FROM
OECD Publications, 2 rue Andre-Pascal, 75775 Paris, France
($24). Web site: http://www.oecd.org.
PUB TYPE
Books (010)
-- Collected Works
General (020)
EDRS PRICE
MF01/PC10 Plus Postage.
DESCRIPTORS
Academic Achievement; *Educational Economics; Educational
Facilities Design; *Educational Facilities Planning;
*Educational Research; Elementary Secondary Education;
Flexible Facilities; Foreign Countries; Higher Education;
Human Capital; Student College Relationship
Europe; *Facility Management; *Performance Indicators
IDENTIFIERS
ABSTRACT
This collection of papers covers, from a European
perspective, the basic aspects of investments in physical educational
facilities, as well as important issues in the economics of education. Four
themes are covered. The first presents the art of the economic analysis of
educational projects. The second focuses on the contribution of performance
indicators in the evaluation of education systems. The third concerns the
management of physical resources for education, especially the relationship
between school environment and student achievement. The last theme addresses
the design and equipment of physical facilities for education. It argues for
investments in building human capital, and provides the tools for assessing
the rates of return on these types of investments. Final comments focus on
facility flexibility: what it is and which requirements it is supposed to
meet. The papers included are: "Building Human Capital in Europe: Issues and
Methods" (George Psacharopoulos); "Cost-Benefit Analysis in Education
Projects: Internal Rates of Return, Methodologies and Theoretical Objections"
(Tom Healy); "Externalities, Non-Market Effects, and Trends in Returns to
Educational Investments" (Walter W. McMahon); "Investment in Education in
OECD Countries--Finance and Ownership" (Andreas Schleicher); "What Do
Developed Countries Today Demand from Their Educational Systems?" (Torsten
Husen); "What Do Developed Countries Expect of Their Educational Systems?
Reflections on the French Experience" (Francois Louis); "Making Better Use of
School Buildings: Schools as Social Capital" (Kenn Fisher); "The Impact of
School Building Conditions, Student Achievement, and Behaviour" (Glen I.
Earthman); "Environmental Appraisal of Education Facilities" (Christopher
French); "Patterns and Design Strategies for New School Buildings" (Rodolfo
Almeida); and "Investing for Flexibility" (Sam Cassels and Peter McLennan).
(Most chapters contain references.)
(GR)
Reproductions supplied by EDRS are the best that can be made
from the original document.
The Appraisal
of Investments
in Educational
Facilities
EDUCATION
Air
U.S. DEPARTMENT OF EDUCATION
Office of Educational Research and Improvement
CATIONAL RESOURCES INFORMATION
EDUCATIONAL
CENTER (ERIC)
This document has been reproduced as
received from the person or organization
originating it.
0 Minor changes have been made to
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a Points of view or opinions stated in this
document do not necessarily represent
official OERI position or policy.
PERMISSION TO REPRODUCE AND
DISSEMINATE THIS MATERIAL HAS
BEEN GRANTED BY
S. Edam
000
TO THE EDUCATIONAL RESOURCES
INFORMATION CENTER (ERIC)
1
The Appraisal
vestments
f
ucationall Facilities
f[n E
ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT
ORGANISATION FOR ECONOMIC CO-OPERATION
AND EVELOPMENT
Pursuant to Article 1 of the Convention signed in Paris on 14th December 1960,
and which came into force on 30th September 1961, the Organisation for Economic
Co-operation and Development (OECD) shall promote policies designed:
to achieve the highest sustainable economic growth and employment and a ris-
ing standard of living in Member countries, while maintaining financial stabil-
ity, and thus to contribute to the development of the world economy;
to contribute to sound economic expansion in Member as well as non-member
countries in the process of economic development; and
to contribute to the expansion of world trade on a multilateral, non-discrimina-
tory basis in accordance with international obligations.
The original Member countries of the OECD are Austria, Belgium, Canada, Den-
mark, France, Germany, Greece, Iceland, Ireland, Italy, Luxembourg, the Netherlands,
Norway, Portugal, Spain, Sweden, Switzerland, Turkey, the United Kingdom and the
United States. The following countries became Members subsequently through ac-
cession at the dates indicated hereafter: Japan (28th April 1964), Finland (28th Janu-
ary 1969), Australia (7th June 1971), New Zealand (29th May 1973), Mexico (18th May
1994), the Czech Republic (21st December 1995), Hungary (7th May 1996), Poland (22nd
November 1996) and Korea (I2th December 1996). The Commission of the European
Communities takes part in the work of the OECD (Article 13 of the OECD Convention).
Publie en francais sous le titre :
L' EVALUATION DES INVESTISSEMENTS EN EQUIPEMENTS EDUCATIFS
© OECD 2000
Permission to reproduce a portion of this work for non-commercial purposes or classroom use should be
obtained through the Centre francais d'exploitation du droit de copie (CFC), 20, rue des Grands-Augustins,
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All other applications for permission to reproduce or translate all or part of this book should be made to
OECD Publications, 2, rue Andre-Pascal, 75775 Paris Cedex 16, France.
4
OECD 2000
EUROPEAN 11NVESTMENT BANK
The European Investment Bank (EIB), the European Union's financing institu-
tion, was established in 1958 by the Treaty of Rome. Owned by the European Union's
Member States, the EIB enjoys its own legal personality and financial autonomy.
As an EU institution, the El B's mission is to finance investment projects which con-
tribute towards economic integration and greater social cohesion of the Member States.
The Bank's financing activities focus on supporting the following EU policy objec-
tives:
O Regional development: areas lagging behind in their development (Objective I areas,
as classified under European Structural Funds), areas faced with industrial decline
(Objective 2), rural areas encountering conversion problems (Objective 5(b)) and
Arctic areas with an extremely low population density (Objective 6).
transfer net-
O Creation of trans-European transport, telecommunications and energy
works.
O Protection of the rural and urban environment.
O Increased energy self-sufficiency and more efficient use of existing energy resources.
O Health and education development.
O Reinforcement of the competitiveness of European industry and support for small
and medium-sized enterprises (SMEs).
The Bank raises funds for lending by issuing bonds on the international capital
markets. Their first-class "AAA" credit rating enables the EIB to borrow on the finest
terms available. Operating on a non-profit basis, the Bank lends the proceeds of
these borrowings on highly favourable terms, adding only a small margin to cover.its
operating costs. The EIB works in close co-operation with the banking community, both
when borrowing and lending.
The Bank applies a selective approach to its financing decisions. Each invest-
ment proposal must meet one or more of the above mentioned EU policy objectives.
In addition, each project is thoroughly scrutinised for financial, technical and economic
viability and also for compliance with EU legislation on environmental issues and pro-
curement.
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5
OECD 2000
Although the main thrust of Bank activity is necessarily within the European Union,
which accounts for 90% of aggregate lending, the EIB also helps to implement the EU's
development aid and co-operation policy towards third countries, financing projects
in some 120 non-member countries with which the EU has concluded co-operation
agreements, notably in : Africa, the Caribbean and the Pacific (ACP), the Republic of
South Africa, the southern-rim Mediterranean countries, Central and Eastern Eu-
rope, Asia and Latin America.
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6
OECD 2000
PROGRAithIMIE ON EDUCATIONAL UnDlING
The Programme on Educational Building (PEB: Programme pour la construction et
l'equipement de l'education) operates within the Organisation for Economic Co-operation
and Development (OECD). PEB promotes the international exchange of ideas, infor-
mation, research and experience in all aspects of educational building.
The overriding concerns of the Programme are to ensure that the maximum edu-
cational benefit is obtained from past and future investment in educational buildings
and equipment, and that the building stock is planned and managed in the most effi-
cient way.
The three main themes of the Programme's work are:
contributing
0 improving the quality and suitability of educational facilities and thus
to the quality of education;
of money
0 ensuring that the best possible use is made of the very substantial sums
which are spent on constructing, running and maintaining educational facilities;
education
a giving early warning of the impact on educational facilities of trends in
and in society as a whole.
OECD 2000
The Appraisal of Investments in Educational Facilities
FOREWORD
The OECD Programme on Educational Building (PEB) in collaboration with the
Projects Directorate of the European Investment Bank (EIB) organised an international
conference on the evaluation of investment in educational facilities in Luxembourg on
16 and 17 November 1998. The conference brought together 90 researchers, education
planners and policy-makers, managers and architects. For the EIB this was a new field
of activity, since until recently it has not been involved in financing education projects.
A resolution adopted by Heads of Government of the countries of the European Union
in June 1997, aimed at encouraging economic growth and reducing unemployment,
specified that the EIB would henceforth devote a part of its loans to educational pro-
jects. The Bank has as a result broadened its eligibility rules and is encouraging re-
search into the evaluation of investments in education at an international level.
The introduction and the conclusions of this book were written by Isabelle Etienne,
Consultant, OECD Programme on Educational Building.
This book is published on the responsibility of the Secretary-General of the OECD.
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OECD 2000
TABLE OF CONTENTS
9
Introduction
Chapter 1. Economic Analysis of Educational Projects
15
Building Human Capital in Europe: Issues and Methods
17
George Psacharopoulos
Cost-benefit Analysis in Education Projects: Internal Rates of Return,
Methodologies and Theoretical Objections
33
Tom Healy
Externalities, Non-Market Effects, and Trends in Returns
to Educational Investments
51
Walter W. McMahon
Chapter 2. Performance indicators for Educational Projects
85
Investment in Education in OECD Countries, Finance and Ownership
87
Andreas Schleicher
What Do Develop Countries Today Demand from their Educational Systems ?
113
Torsten Husen
What Do Develop Countries Expect of their Educational Systems ?
Reflections on the French Experience
127
Francois Louis
155
Chapter 3. Management of Physical Resources for Education
Making Better Use of School Buildings: School as Social Capital
157
Kenn Fisher
The Impact of School Building Conditions, Student Achievement,
and Behaviour
181
Glen I. Earthman
7
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OECD 2000
4. Design and Equipement of Physical Facilities for Education
Chapter
195
Environmental Appraisal of Education Facilities
Christopher French
197
Patterns and Design Strategies for New School Buildings
Rodolfo Almeida
205
Investing for Flexibility
Sam Cassels and Peter McLennan
219
Conclusion
225
Notes
232
18
10