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Submitted by Steven Klees on

Education As If People Mattered

Steven J. Klees
University of Maryland

Shanta Devarajan is known for his antipathy to public education, in general, and teachers, in particular. His recent blog, Education as if Economics Mattered, on the World Bank website, should therefore come as no surprise. In it, he argues that education, at all levels, is a “private good” and it is best to eliminate government funded schools and let the private sector provide, subject to some government regulation.

This argument reflects a poor understanding of economics. A private good is, by definition, a good that can be efficiently provided by a private market because it does not have any externalities, public good dimensions, impact on economic growth, information asymmetries, monopoly power, imperfect capital markets, etc. For 50 years, since the advent of human capital theory in the early 1960s, literally hundreds, perhaps thousands, of mainstream economists have argued that education has these features in spades. Even higher education, according to a major World Bank study (done with UNESCO) in 2000, was argued to have such major externalities that one could no longer trust rates of return based on individual income effects and that the Bank had been wrong to recommend against public investment in higher education.

Shanta argues for the privatization of education with only minimal recognition of how economically inefficient that would be. And his only recognition of the major inequalities that this would yield is a throwaway comment about “equity considerations.” Perhaps the most significant public policy investment that tempers the inherent inequalities of our market system is public education. While public education is very unequal in a myriad of ways, privatization will make education much, much, more unequal.

I was surprised that Shanta argued that “universities are chronically under-funded.” This is true. But Shanta does not acknowledge that the major cause for under-funding is the World Bank which has recommended cutting public funding for higher education for decades, as it has for all education and most government activities as part of its privatization agenda.

And, as usual, Shanta blames the brunt of education’s very real problems on teachers and proposes coercive and demeaning “solutions” that any professional, e.g., World Bank staff, would be aghast at if it were applied to them. Teacher absenteeism is the result of the abysmally low salaries teachers are paid, again, in part, a result of Bank policy. I was recently working in Uganda where primary and secondary teacher salaries were below the poverty line, yet a Bank study argued they were too high.

We need an education policy that focuses on the needs of children and teachers. Successful educational systems treat students and teachers well, hold them in high esteem, and provide equal opportunities through public education.