Improving Efficiency in the Delivery of Education  Provision of a good school environment with better material resources & more
environment with better material resources & more qualified
 An argument can be made for greater privatization of the school system by allowing the co-
existence of private schools with public schools
 Greater competition is believed to result in greater efficiency
 Index of private financing & costs per capita of public higher education are further shown to be
inversely related in Asia
 Rates of return to education decline with years of schooling as expected (Table 10.7)
 Returns are normally highest for primary education & lower for higher levels of education
 However, the intrinsic merit good nature of education is not that strong since social returns are
lower than private returns
 Based on the successful experience of the NIEs, this strategy to have larger classes & higher pay
for teachers has paid off in terms of a more efficient delivery of educational services
Rates of Return to Education
 A broader cross-cultural study of rates of return suggests that rates of return to education in
poor countries has risen in the past few decades
 This may reflect the increased openness that has made technology more accessible throughout
the world & raised the returns to skilled labor in poorer countries
Gender Disparities in Education
 Literacy rates between genders are very similar for many Asian countries with the exception of
South Asia (Table 10.8)
 Enrolment rates are similarly biased toward men in South Asia
 In several countries (Indonesia, Philippines & Thailand), tertiary education is higher for women,
a somewhat surprising result given gender discrimination in so many other aspects of economic
life
Major Policy Conclusions for Asia
 Curbing population growth means lower dependency ratios; this increases the ability of the
society to provide education with the same resource base.
 It pays to educate teachers more intensively, to develop better classroom materials & to pay
teachers more.
 It pays to put money into education of females.
 It pays to introduce some private schools at the tertiary level and/or reduce the subsidy to
tertiary education.
 To improve efficiency of the delivery of educational services, experiments with higher
pupil/student ratios & decentralization of authority over curriculum, management & budgets
are encouraged.
teachers is critical for developing countries.
 There is a strong case for cutting the subsidy to tertiary education in developing countries,
including the brain drain problem, higher costs per student & lower returns using the “merit
goods” logic.
 It is important to recognize that a balance must be struck between various policy objectives
 If the educational system is to be used to address poverty & income inequality it may be useful
to consider scholarships for gifted poor students rather than an across the board cut in
subsidies to tertiary education
 The provision of more private schools runs the risk of creating an “educational divide.”
 There are missing credit markets for education that should be addressed either through
government program or greater access to bank loans.
Health & Nutrition
 Health, for our purposes, means absence of illness & infirmity
 As indices of health (or illness), we use morbidity & mortality rates
 Mortality is more closely monitored than morbidity & is more easily defined
 Infant mortality, life expectancy, crude birth rates & crude death rates are also terms that are
widely used
Health Patterns
 Health conditions of populations have improved gradually because of advances in the medical
fields
 Life expectancy has increased, infant mortality has decreased & morbidity may also have fallen
 Availability of safe water, sanitation, immunization & access to medical facilities have also
improved in Asia & the world
Health & Economic Growth
 Health improvements & economic growth go together
 Can their mutual causality be disentangled?
 The curve relating per capita income & life expectancy has shifted up over time, but it is still
virtually flat after a certain level of per capita income
 Life expectancy rates in the poorer countries have caught up rapidly with rich countries in the
1960s owing to advances in medical technology
 Poor health has an adverse impact on labor productivity but is this a cause or a consequence of
economic growth?
 In some cases, improvements in the health environment (malaria eradication) was followed by
economic development in several Asian countries – including Thailand and the Philippines
 In other cases, the causation is less clear
 The relationship between infant mortality & economic growth is particularly strong
Aspects of Health (Environmental Health)
In many developing countries, the spread of infectious & parasitic diseases can be effectively
controlled by ensuring that people have access to clean water & by the provision of an adequate
waste disposal system
Experience has shown that such measures have effectively controlled the spread of waterborne
diseases such as typhoid, dysentery & cholera
Improving housing conditions – ventilation & space – can also minimize the spread of tuberculosis.
Health risks for these diseases are exacerbated by the presence of urban slums in developing
countries
Aspects of Health (Malnutrition & Food Consumption)
 What causes malnutrition & how could nutritional improvements contribute to economic
development?
 The consumption of food, like any other good or services, are determined by three elements:
 Income, Prices, Tastes
 Engel’s law says that poorer households devote a greater proportion of their budget to food &
that they have a relatively high income elasticity of demand for food
 Within households, female children are generally made to accept the greater nutritional burden
of adjustment to unfavourable price movement
 Many traditional societies have beliefs about the health effects of various foods that are not
supported by modern nutritional science
 Soybean products, for example, are found to be a cheaper source of protein than animal
products, yet families still demand meat
Aspects of Health (Medical Facilities & Services)
 Medical facilities & services in developing countries are very inadequate in providing for health
needs of the population
 Public expenditures on health is much lower than those for education & defense
 Developing countries tend to spend far more on curative resources than on preventive health
care
Public Health Policies in Asia
 Public health spending could be increased as a proportion of total health spending to address
needs of poor
 In Asia, infant mortality & income growth are highly negatively correlated
 Causation is unclear but health outcomes are closely interrelated with speed of development
 Medical services with higher positive externalities should be subsidized
HIV/Aids in Asia
 HIV/AIDS prevalence in Asia has increased in the last decade and pose significant constraints to
development in the region
 4 high risk groups: sex workers & their clients, drug users & men who have sex with other men
 HIV/AIDS impacts on the economy via …
 Lost productivity among infected members of the workforce
 Lost income and potential savings of infected working-age individuals
 Reduction in the stock of human capital
 To control the spread of AIDs, control of the spread from 4 high risk groups is required
 Some measures include:
 Promote the use of condoms among sex workers & bisexual men
 Publicize the necessity for using measures to protect against Aids such as condoms & not sharing
needles
 Make condoms & needles widely available & at reasonable prices or else supplied for free in
clinics
 General promotion of HIV/AIDs awareness through public media & NGOs as well as newspapers
& magazine articles
 Important considerations in HIV/AIDS containment
 Wealth Matters!
 Education Matters!
- Having more wealth and higher levels of education lead to a better understanding of the
disease – how it is contracted and its devastating consequences – and this leads to less
risky behavior
- once HIV penetrates society, the poor and the uneducated are at highest risk
- wealthier, more educated married women tend to speak to
 their husbands more about avoiding AIDS
 Policy Implications – preventative
 There is a need for highly targeted information campaigns tailored for the poor and the
uneducated
 increase incomes through greater employment opportunities for all
 Keep education levels high – get more children and young adults to attend school for more
years.
 Policy Implications – curative
 HIV/AIDS treatment and drugs need to be made available to sufferers at reasonable prices
 Increase R&D efforts in treatment & drug development