[School Stories] Why Some Countries Stay Poor No Matter How Much They Learn

Will the economy do better the more education people receive? Many people have believed so. Because of that belief, many advanced countries and international organizations provided massive aid and investment for primary education in poor countries. As a result, they achieved major gains on the surface. In 1960, only 28% of school-age children worldwide attended primary school, but by 1990 that figure had reached nearly 100%. It was truly an enormous change. In particular, support for children’s education in African countries was substantial.

If the original belief that more education leads to a stronger economy were correct, then it would follow that those countries should by now have seen their economies improve as well. But in reality, the results were nothing of the sort.

Labor productivity indicators reveal this situation. For education to bring about income growth, workers’ productivity must rise. Yet the economist Lant Pritchett, who studied the correlation between Africans’ years of schooling and labor productivity, found that there was almost no relationship between the two.

During the 1960–1987 period, the rate of increase in education investment in Angola, Mozambique, Ghana, Zambia, Madagascar, and Sudan was far higher than in Asian countries such as Korea, Japan, and Singapore. However, the rate of productivity growth had nothing to do with it. Productivity growth, which was 3% in the 1960s, fell to 2.5% in the 1970s, -0.5% in the 1980s, and 0% in the 1990s. If productivity does not rise, income cannot rise either. That is why the people of these countries remain poor.

What is the reason? First, an increase in investment in education does not necessarily mean an improvement in the quality of education. Such investment can improve the treatment of teachers and education officials, expand school facilities, or make them better. But unless teachers’ attitudes change, it does not have much effect on improving students’ abilities.

Second, it is closely related to the country’s institutional foundation. In countries with an institutionally control-oriented foundation, the knowledge learned in school is highly likely to be mobilized as a means of controlling the people more effectively. It is also used to lobby bureaucrats more effectively. In that case, knowledge is not a remedy for the economy but rather a poison. In countries that lack the institutional foundation for knowledge to be used productively, education can even become an obstacle to growth.

In the end, what matters is the institutional foundation. Before increasing investment in education, it is necessary to create a society in which people who work hard succeed.

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Original title: [학교이야기] 배워도 배워도 못사는 나라들

Author: Center for Free Enterprise (CFE)

Date: 2008-06-30

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=column&pn=19&idx=10709