Alternate Forms of Government Intervention in Education

An Economist’s Perspective

Pakistan Institute of Development Economics, IslamabadPakistan

Presented By

• Muhammad Yasir Anwar

Synopsis

• Rationale of the study• Study methodology• Current Forms of Government Intervention• Analysis of Leading Foreign Education Systems– Finland– South Korea– Singapore

• Alternate Forms of Government Intervention• Data Analysis and Interpretation

SECTION IStudy Rationale and Methodology

Education Sector: Socio-economic Impact

• Five pillars of national development are:– The family base– The religious base– The economic base– The administrative base– The educational base

• Education has immense impact on a socio-economic development.

• Nations such as South Korea, Finland and Singapore have aptly demonstrated the strong role of education in national development.

Education: A Commodity

• From an economist’s perspective education is a commodity of distinct nature.

• Like other commodities education is driven by gap between supply and demand.

• Education represents a budding business area for private entrepreneurs.

• However in light of the nation wide impact of education government has to take helm affairs.

• “Give a man a fish and he will be happy for the day, teach him how to fish and you have ruined a wonderful business opportunity” does not apply to education.

Education: An Economic Perspective

• From an economical viewpoint state intervention is necessary to ensure uniform cost and quality of education for all income classes.

• State funding and regulations should be aimed at financing and regulating both public and private sector educational setups.

• Meritocracy has to be widely adopted and implemented through state efforts

• Leading foreign education systems are based on stringent state funding and regulatory frameworks.

Study Methodology

• Study conducted in three phases:– Phase I: Current State of Government Intervention in Pakistan– Phase II: Study of Leading Educational Systems from Across the

Globe– Phase III: Proposition of Alternate Forms of Government

Intervention

• Focus on financial and monetary aspects/modes of government intervention.

• Education systems of Finland, Singapore and South Korea have been dissected.

• Alternate framework for intervention is based on the analysis of fore stated foreign systems.

SECTION IICurrent State of Government Intervention

Education Dilemma of Pakistan

• Boom in number of private sector educational institutes has been witnessed in recent years.

• Despite this illiteracy rate is at par with severely underdeveloped countries.

• Pakistan is home to the second largest population of out of school children behind Nigeria.

• Education system suffers from chronic ethnic, linguistic, social and economical divides.

Grey Areas in Education Sector

• Lack of grass root implementation of state responsibility of providing free and compulsory education up to secondary level as envisaged by Article 25-A Constitution of Pakistan 1973.

• Lack of centralized and homogenized educational system.• Low resource mobilization for development of

educational setups, bodies and legislation.• Minimal percentage of GDP (2.7%) is being spent on

education which is overshadowed by defense and recurrent state expenditures.

Ref. UNESCO et. al. 2007

Current Areas of Intervention

• The federal and four provincial governments are currently intervening in the following areas of education:– Educational Policy Making– Curriculum Development– Financial Planning and Resource Allocation– Low Cost Education through Public Sector Institutes

• Post the 18th amendment education has become much of a provincial subject.

• However the inexperience of provincial bodies in managing education sector has been a leading cause of financial mismanagement and discrepancies.

• Federal government intervention is poorly perceived by provincial governments on nationalistic grounds.

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Areas of Economic Intervention

• Both federal and provincial governments regulate the economics of Pakistan’s education sector through:– Low Cost Education at Public Sector Institutions– Allocation of National Financial Resources for Educational

Infrastructure Development and Recurring Expenses

• Albeit of its low cost, education at public sector institutes is deemed to be of low quality.

• Low GDP to education ratio is evident of poor state commitment towards uplift of education sector in Pakistan.

Ref. UNESCO et. al. 2007

SECTION IIIAnalysis of Foreign Education Systems

Foreign Education Systems

• Analysis of leading foreign education systems are imperative for developing the targeted framework.

• Globally the educational systems of following countries have consistently ranked at the top:– Finland– South Korea– Singapore

• All three educational systems are distinguished through their unique models of state funding and regulation in education sector.

• However all three recognize education as more than just a business opportunity.

• By dissecting and tailoring these educational systems, an optimal framework for government intervention can be developed for Pakistan.

Educational System of Finland

• Finland ranks as the second best welfare state in the world.

• Part of Finnish social welfare goals if to impart free and uniform education to every national.

• Finland has zero tuition fees and lowest interest rate on student loans (~1%).

• Government intervention in education sector is centered on full state funding of all educational institutions and educational related expenses.

• Teacher training is performed at university level and one must hold masters degree to qualify for any teaching post.

Finnish Government Intervention

• Central and local governments/authorities are fully responsible for funding all aspects of provision and development of education.

• Universities are fully state funded through central government while lower level institutes receive funding as below:– Central govt. provides ~25-70% funding for start-up and ~40-60% funding

to cover operational costs to local authorities.– Rest is generated by local authorities through indigenous resources and

taxation.

• Non-subsidized private sector institutions are non-existent, the few private sector institutes receive full state funding.

• Costs of transportation, warm meals, books and teaching aids etc are borne by the state.

Educational System of South Korea

• South Korean education system ranks above Finland and is touted to be the most competitive in the world.

• Development of education sector has historically been at the apex of Korean national development.

• Bearing close resemblance to Pakistan, both private and public sector institutes exist.

• Educational sector is tightly regulated through a central Ministry of Education, Science and Technology.

• Very little autonomy is exercised by educational institutions w.r.t. fund generation and teacher promotions.

Korean Government Intervention

• South Korea spends 7.6% of GDP on education which is higher than OECD average of 5.9%.

• MEST funds both private and public sector institutes based on following model:– Public sector schools receive 80% funding; rest is generated through self-

financing.– Private schools called Hang-wons receive small amount of state funding;

rest is generated through self-financing.– Hang-wons operate on for-profit basis and generally impart better quality

education.

• This intervention model closely resembles that of Pakistan however stronger state funding, diligent state regulations and well crafted curricula make it one of the most revered education systems.

Educational System of Singapore

• Key to Singapore’s educational system is strong focus on:– Meritocracy– State Funding of Meritorious and Financially Weak Students

• Singapore has both public and private sector institutions however state funding of meritorious students and low income families is guaranteed.

• Although private institutes provide education at higher price, massive state funding does not hinder academic growth of poor or brilliant students.

• Singapore has transformed in to an international hub for higher learning.

Government Intervention: Singapore

• Several funding schemes have been implemented by the state to ensure uniform learning opportunities.

• Following are the key funding schemes:– No tuition fee for 6 years of compulsory education.– Financial Assistance Scheme (FAS) to provide financial

assistance for families with per capita income less than SGD$ 625.

– Edusave Merit Bursary (EMB) is given to ~40,000 students from low and medium income families on merit basis.

• By allocating funding on the basis of merit and per capita income, Singapore has optimized resource allocation.

SECTION IVAlternate Forms of Government Intervention

Alternate Forms of Government Intervention

• Based on study of foreign education systems following alternate forms of government intervention are presented:– Case I: Full State Funding of Education– Case II: State Funding on Merit and Need Basis

• Apart from these forms of economic intervention public private partnership should be sought.

• The above two state funding models can not be effective unless a uniform nationwide system and curricula are established.

Case I: Full State Funding of Education

• This model envisages a nation wide mechanism for full state funding of education.

• Federal government shall fund all aspects of education through a central body in concert with provincial subjects.

• Central body shall be modeled on lines of South Korean MEST.

• Full state funding is possibly solely through allocation of larger portion of GDP to education.

Case II: State Funding on Merit and Need Basis

• Based on Singapore’s funding model of meritocracy and need basis.

• Financial assistance schemes such as FAS / Edusave should be implemented for low income families and brilliant students.

• However model should only adopted once a uniform and free primary education system has been implemented across the country.

• Stringent regulatory measures need to be taken for effective adoption of any of the two funding model.

Public-Private Partnership in Education

• Proposed intervention models can be further refined by forging stronger public-private partnership.

• UNESCO et. al. 2007 suggests that a framework for public-private partnership in following areas should be developed:– Teacher training and professional development by private

institutions.– Government to provide tax rebates and other monetary

incentives to be provided to private institutions in response.

THANK YOUQ & A