Paying teacher salaries with mobile phones

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no worries, everything here is orderly and under control, all money is being accounted for in a clear and timely manner
no worries, everything here is orderly and under control,
all money is being accounted for in a clear and timely manner

I often find that a sure way to generate rather heated discussions in many quarters is to bring up the topic of teacher salaries. They're too low! or: They're too high! They should be linked to [insert some sort of 'performance indicator']! or: Attempts to link them to [insert name of a performance indicator] are misguided (and perhaps even dangerous)!

I'll leave it to others more informed and expert than I am to weigh in on such (often quite contentious) debates. However one might approach such discussions, and whatever conclusions one might draw from them, there isn't a lot of debate about one issue related to teacher salaries that has been well documented, and widely (and rightly) deplored.

Many teachers around the world suffer as a result of poorly-functioning systems to pay the salaries [pdf] they are due [ppt]. This is especially problematic, and notable, given that teacher salaries have for many decades constituted huge percentages of the overall education budgets in many countries. As a World Bank publication from a few years ago (Teachers for Rural Schools : Experiences in Lesotho, Malawi, Mozambique, Tanzania, and Uganda) laments, "Teachers in remote schools are [compared with their colleagues in more urban areas] more likely to be the direct victims of administrative failures, which undermine teacher morale and damage the system. One frequently mentioned administrative failure is the delay in paying teachers’ salaries and allowances." An 'administrative failure' of this sort can have many causes. Even where sufficient budget exists to pay teachers, flawed teacher salary systems, poor internal controls, logistical challenges related to transport, and corruption can conspire to ensure that in many places, especially in rural areas in poor countries, teacher salaries are sometimes paid only infrequently, often with great delay. The results of this can be devastating for education systems -- to say nothing of the impact on individual teachers, schools, students and local communities.


Back when I worked with the World Bank's infoDev program, one of my responsibilities was to serve as a point person on 'mobile money' issues, briefing groups on emerging lessons and experiences from nascent activities to use mobile phones to transfer money from one person to another. I left infoDev in 2008, just as activities in this regard were really starting to heat up (Kenya's M-Pesa program, the best known 'mobile money success story', launched in 2007), but continued to meet semi-regularly with folks -- colleagues from the World Bank and other international donor agencies, government officials, NGOs and foundations, businesspeople, researchers -- who were interesting in exploring how new mobile payment options might be used in inventive ways to help address some longstanding developmental challenges. (Those totally new to the topic may benefit from watching this short video from CGAP, which demonstrates how mobile money activities look in practice.) Most of these conversations, as it happens, included considerations of how money transfers via mobile phones might be used to ensure that teachers got paid, in full and on time. As I prepare for a trip next week to the Mobile World Congress in Barcelona, I realize haven't fielded one substantive information request related to this topic in the past three years.

Up until about 2010, I met quite often with groups who were looking for creative ways to help address the 'paying salaries to teachers in rural areas challenge' and who had seized on the idea of taking advantage of the increasing ubiquity of mobile phones in such areas to help fashion some sort of 'solution'.  In the last three years, however, the volume around these sorts of discussions in many quarters has almost died out. Part of this might be explained by the fact that there are now many 'experts' on mobile money issues, people much more expert and well informed than I am about related issues, and so I simply might be 'out of the loop'. (Back in the 'early days' of work on this topic, I could never shake the nagging feeling that the reason that I was approached by so many groups for related information and advice was at least partially a result of the 'in the valley of the blind, the one-eyed man is king' phenomenon.) That said, given that a regular part of my daily work at the World Bank is to field questions related to the use of new technologies in education in all sorts of ways around the world, and that a lot of my job isn't so much about in providing answers, but about helping people formulate better questions, the fact that this question seems no longer to be a topic of much discussion makes me wonder:

Whatever happened to the idea of paying teacher salaries with mobile phones?


The basic case for why some education systems might want to look at ways to pay teachers (or at least some teachers) via digital payments utilizing mobile phones can be laid out pretty easily. Some commonly mentioned elements of this case include:

1. Business as usual isn't working
Especially in places where teachers are paid in cash, and this cash has to travel large distances (and through many hands) before it eventual reaches teachers, current payment systems may be slow, inefficient, and open to various abuses.

2. Reach
One of the challenges in paying teachers, especially in poor, remote and/or rural communities, is that the teachers themselves may not have bank accounts -- and, if if they did, they may be near where banks are located. While banks may be far away, for increasing numbers of teachers in such circumstances, mobile phones may be (literally) less than an arm's length away, and mobile connectivity is increasingly being rolled out, even to some of the most remote regions of countries. (Even where a given signal may not reach a teacher's village, odds are that she would have to walk or ride a much shorter distance to get on a mobile network than to reach a place where she could receive her salary in person.)

3. The technology is here -- as are some useful business and regulatory models
Multiple examples from around the world, from Kenya to Pakistan, from Paraguay to the Philippines, have demonstrated that 'mobile money' is possible.

4. Speed
When doing some work last year in Papua New Guinea, I was told of cases where teachers had to travel one week each way to reach the place where they could collect their salary ... which was paid every two weeks. (The effect on teacher absenteeism in such circumstances should be pretty easy to calculate; it doesn't matter how good your teacher is if she isn't in the classroom.) Mobile money transfer, in contrast, can take place more quickly than it the time necessary to turn on one's phone.

5. Efficiency
Current systems for paying teacher salaries in many countries are very labor intensive and involve complicated and expansive logistical networks of human and physical infrastructure to ensure that money -- in the end, typically in the form of cash -- reaches its intended recipients. Under mobile money payment scenarios, there may well be opportunities to realize great efficiencies through by-passing certain component parts of the existing salary payment infrastructure, relying instead on existing, quite reliable mobile phone networks.

6. Tracking and transparency
With teacher salaries representing up to 90% of recurrent education budgets in some countries, the amounts of money involved can be huge, which makes it especially important to know where it's going (and if it has reached its destination). Transferring these monies on a regular basis brings with it special challenges related to tracking and reporting. With so much money is involved, the electronic audit trails created as a result of mobile money transfers can be useful in this regard.

7. Corruption
Corruption is an endemic problem in many education systems. One example of this in many places is the persistent and pernicious phenomenon of 'envelope theft', where one's pay packet is a little thinner than it should be because some of the bills meant to be there have 'mysteriously' gone missing. (A technical term for this in the research literature is 'leakage' [pdf]. Unlike what might happen with water pipes as a result of faulty design, missing elements of teacher pay packets tend to 'leak' not onto the ground, but into the hands and pockets of someone else -- usually a superior.) Cut out the middlemen, transferring money directly to a teacher's mobile phone, and the opportunities for envelope theft dissipate.

tell me again how we squeeze this cash inside the handset?
tell me again how we squeeze this cash inside the handset?

That said, there are many undeniable obstacles standing in the way as well. A few of the common ones I hear voiced include (I'll note parenthetically that some may be more valid, or more challenging, than others):

1. Inertia (traditional practices, traditional thinking)
Whenever something new is considered -- or even when for some reasons when something new is *not* considered -- one shouldn't downplay the fact that change is uncomfortable. The easiest thing to do tomorrow is usually what was done yesterday.

2. Entrenched interests
The fact that teachers in poor, remote communities may not benefit from existing mechanisms that should provide them with their full pay in a regular timely manner doesn't mean that other groups don't benefit from existing arrangements. Those who benefit from 'leakage' in the system are one obvious example here -- less obvious, but in some cases even more difficult to dislodge, are the institutional and bureaucratic interests (power over decision making, larger budgets, more jobs, and opportunities for patronage) that can advocate against consideration of mobile payment options for teachers.

3. Trust
In systems where teachers already don't trust that they will be paid on time, and in full, it can be difficult to convince them that *they can instead be paid directly, and the proof of this is a text message that arrives, as if by magic, in their phone's in-box*. When presented with plans to begin paing them via mobile money, teachers, and the unions which represent them, may well wonder where the 'catch' is. This is especially true in places where mobile money is novel, and not commonly used in broader society. (In some contexts, it is interesting to note that people may not trust 'banks' as well -- but do, by virtue of prepaying for mobile phone credits, appear to trust their mobile phone provider.)

On a related note:

4. Security/fraud
Mechanisms may not be in place to prevent theft and fraud -- or to detect where/when it is occurring, and how. Where it has been detected, an inadequate legal framework or law enforcement capacity may exist.

5. Regulations
Existing laws and regulations may preclude the payment of teacher salaries through transfers of mobile money.

6. Insufficient infrastructure
The fact that mobile payment systems offer an opportunity to 'leapfrog' (to adopt the term almost reflexively invoked whenever discussions of the potential of mobile phones for communities in developing countries come up) over existing infrastructure deficits (e.g. there are no payment offices or banks nearby) does not mean that no infrastructure is required. Teachers need to have mobile phones. The need access to affordable mobile networks. While incredible advances have been made in these regards over the last decade, these are still very real challenges for teachers in many remote communities. But progress continues to be made. (It is perhaps also still worth noting to those unfamiliar with mobile money schemes that this can, and does, work on low end mobile phones using text messages -- in other words, this isn't something that requires the latest high end smart phones.)

7. Teachers don't have bank accounts, and so there is no way to pay them electronically
This indeed a potential obstacle. That said, an important impetus behind the rise of mobile money in many places has been an interest in helping to 'bank the unbanked', to use mobile phones to help increase access to financial services for the poor in inventive ways (e.g. linking a subscriber's SIM card and a 'virtual mobile wallet', in turn linked to a bank account).

8. Cash is king
What good is it if teachers receive their money via mobile payments if there are no local merchants who accept mobile money, and there are no convenient ways to convert mobile money into cash?

9. No local mobile banking or payment provider (or only one, or too many)
Where there are no local organizations that can facilitate mobile money activities, it goes without saying that such activities are not possible. Interestingly, I have also been told that the existence of such groups can be an obstacle as well. There is only one mobile money provider in our country, a government official once said to me. If we go that route, we risk that this company becomes too powerful. You must remember that teachers represent the largest single group of public sector employees in our country. If they become clients of this company, and this company achieves the economies of scale necessary to make this happen, there is the danger of monopoly. Another government official told me that the problem was that they had more than one mobile money provider, and that they didn't know how to choose between the different options.

10. No demand
No one is interested in changing the way things are currently done, and there is no demand for mobile money services by teachers (or education systems, or international development partners).


Despite these (and many other obstacles or challenges), the good news is that there are a few examples of where mobile payments are happening within education systems. Not many, but a few:

Last year, for example, there was a large pilot in the Democratic Republic of Congo in which tens of thousands of civil servants, thousands of them teachers, were paid via mobile money transfer. Bridge International Academies, which operates in low-cost private schools in Sub-Saharan Africa (including Kenya), utilizes mobile payments extensively. Pilot mobile money schemes to pay teachers were announced in Rwanda, but these ran into some hurdles. The English in Action program in Bangladesh (featured in an earlier EduTech blog post) utilizes mobile payments in support of teacher training activities [pdf]. Civil servants in Quezon City in the Philippines, including teachers, now benefit from mobile payments, and there is also a pilot program involving teachers in Bihar, India. Many other countries continue to consider similar initiatives.

side note: Dispelling a persistent myth

When planning for the early stages of a roll-out of mobile money services, a potential provider of these services may ask:

How do we reach a critical mass of consumers, enough so that we reach a 'tipping point' where mobile money goes from a niche to a mainstream service? If only there were a large group of consumers, all paid by the same employer, and we could enroll all of them in the service .... now *that* might be just the thing to make our business an early success!

I have had it told to me on numerous occasions that this indeed what happened in Kenya, and the fact that teachers were signed up en masse was a key to the acceptance and adoption of M-Pesa. This is a great little factoid, one with a compelling logic and which lends itself well to brief asides during PowerPoint presentations and during Q&A periods at conferences. It is also not true, as Michael Joseph, the pioneering CEO of Safaricom who presided over the launch of M-Pesa, has stated.

The Quezon City program is happening with the support of USAID, which has been at the forefront of many activities around the world exploring the use of mobile money to pay teachers.  Last year, for example, USAID began supports efforts of the Ministry of Education to pay rural teachers in Liberia utilizing mobile money. More notable, and expansive, have been similar efforts in Afghanistan.


What might be the future for utilizing mobile phones, and mobile money, to pay teacher salaries? Early lessons and models from Afghanistan suggest that such schemes may be particularly relevant in post conflict environments. Groups like the GSMA, CGAP and USAID are invaluable sources of information and perspectives on emerging efforts to introduce and expand mobile money programs in many developing countries. Given its support for many specific programs to transfer monies to teachers using mobile phones, USAID may be especially well-placed to add to our collective knowledgebase about what works, and what doesn't, by helping to document how these programs operate, and by evaluating their impact. Some related analytical work from USAID cataloging the existing landscape of initiatives of this sort around the world and summarizing some of the related emerging insights, is due out later this year.

I'll be attending the Mobile World Congress in Barcelona next week and expect to hear about many other initiatives that have been operating largely 'under-the-radar' (at least for international audiences). Please feel free to add links to any notable programs or pieces of related research that I may have missed in the comments section below.

So, to return the question that kicked off this blog post:

Whatever happened to the idea,
commonly discussed a few years ago,
of paying teacher salaries with mobile phones?

Has this turned out to be a clever idea
of little practical relevance in much of the 'real world'
-- outside of a few special, outlier cases --
or was (is) it perhaps an idea (still)
a little ahead of its time?


note: The image used at the top of this blog post of Der Bauernadvocat, a painting by the Dutch master Pieter Brueghel the Younger ("no worries, everything here and orderly and under control, all money is being accounted for in a clear and timely manner") comes via Wikimedia Commons and is in the public domain.  The image of a smartphone on top of some money used later in the blog post ("tell me again how we squeeze this cash inside the handset?") comes from Intel Free Press via Flickr and Wikimedia Commons and is used according to the terms of its Creative Commons Attribution-Share Alike 2.0 Generic license.



Michael Trucano

Visiting Fellow, Brookings, and Global Lead for Innovation in Education, World Bank

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