changes in test scores are also associated with fluctuations in growth between
1975 and 2000. These results are robust and still hold many different sub-
samples, including OECD compared with non-OECD countries, and above
and below average income countries in 1960. The results persist if all ten
observations from East Asia with its rapid growth and high levels of education
are dropped. If the scores are divided into those reflecting basic literacy and the
top 5 per cent in the sample, both thresholds enter the model significantly, indi-
cating that both improvements in basic skills (broad basic education for all)
and having more high achievers are significantly related to economic growth
(Hanushek and Woessmann, 2009).
Education policy
Among the many alternative policies for improving the quantity and quality of
education in developing countries are universal primary education, improved
transparency, efforts to promote teacher attendance, empowering parents and
the local community, and private-sector provision.
Education and market failures
There are market failures in the provision of education. Education (as
discussed above) can have wider social benefits (externalities or spillovers)
such as reduced fertility, the improved functioning of democracy and more
rapid take-up of vaccinations. These benefits will not be taken into considera-
tion in the decision by a household over whether one of its members should
acquire more education. This may necessitate government efforts such as
making schooling up to a certain age compulsory, to ensure the widespread
take-up of at least primary education. Education is also a merit good. Relying
solely on the market to provide education for a price will likely leave the poor-
est in society under-supplied. There is widespread support for the idea that at
least literacy and primary education should be supplied by right to all citizens
of a country regardless of their income levels. There may also be a case for
quality control by government in the form of licensing of schools, teachers and
examination boards to overcome any difficulties that parents would have in
trying to ascertain the same information.
Universal primary education
There is overwhelming evidence that simple physical expansion of educational
facilities and increased spending per student does not lead to clear increases in
children’s learning achievements. The vast expansion of resources devoted to
education in the OECD countries between the early 1970s and mid-1990s
produced no improvement in educational attainment scores. There is, unfortu-
nately, no relationship between schooling outcomes and expenditure per pupil,
Education and Health 125