One hypothesis that emerges from this literature (particularly the literature from
developing countries) is that monetary incentives may increase the participation of lowachieving
students in school and that school systems may be ill prepared to teach them
well (Behrman, Parker, and Todd 2011; Filmer and Schady 2009, 2014). This gives rise
to a potential equity-efficiency tradeoff: targeting high-achieving students through an
incentive based on academic performance such as a merit scholarship may yield higher
learning outcomes.