An analysis of the efficiency of public spending for basic education
Date
1999-10
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Abstract
The importance of human capital in economic-development cannot be denied. Education is one of the means in improving a country's stock of human capital. This research shows the importance of government spending in the provision of education. Education for many developing countries is dominantly provided by the state since most often than not it cannot be provided by the private sector efficiently. This study analyzes the trends in the government's spending for the education sector. Since almost all of the inputs in the public education sector are obtained using the budget it can be stated that the performance indicators are measures of the output of the education sector. The gross national product and real education expenditure have a positive effect in enrollment. This is can be explained because government provision eases access. However, the benefits of free access is offset because many students are not able to stay in school because of high opportunity costs and out of pocket costs like school projects and transportation. The government should concentrate in the provision of basic education because it brings the most externalities.
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Keywords
Basic education, Public spending