Page 8 - Education for Development:George Psacharopoulos University of Illinois at Urbana-Champaign, USA

6 ᐿ࿲ၾආӉj઺ԃٙɢඎ

are formulated based on hunch, intuition or political expediency. They are

seldom based on research findings whether a particular policy would work or
not. Even when there is consensus in the literature that a given policy works,
politicians may ignore it if enacting it means they lose votes in the next election.

Typical example of this, is charging tuition in public universities. Providing
free education for all at all levels sounds great to the people and generates
votes, even if it is impossible to enact it in practice, let alone inequitable of

charging the same price (zero) to rich and poor students. Budgetary allocations
for education as a whole, and distribution to the various levels and types
of education are governed by inertia from year-to-year, perhaps adjusted
for inflation. There is no reallocation of resources away from inefficient or

inequitable activities toward better ones.
In the next section, we review the evidence on which policies could be

based.

Research Evidence

Traditionally, education was in the hands of pedagogues, psychologists and
sociologists. In the last 60 years or so, however, economists play a dominant

role in identifying effective education policies. According to human capital
theory, formulated in the early 1960s, education is a form of investment creating
human capital that is subject to analyses similar to that for physical capital
(Schultz, 1961; Becker, 1964). For example, providing education involves a cost

in terms of resources that can be compared to the benefits of education. Based
on this theory, education policy could give priority to the expansion of those

levels or types of education that exhibit the highest profitability.
Initially, research focused on the link between education and labor market