A common proposition advanced to explain why educational expenditure has been falling in particular countries is to argue that it has been "crowded out" by other pressing demands on government budgets (Noss 1991:23). Escalating debt and defence spending are most commonly cited as responsible. Levels of debt have indeed been increasing (thirteen fold from 1970 to 1990 (UNDP 1992:45) albeit that only 20 countries are responsible for nearly 60% of this debt. In Sub-Saharan Africa debt is comparable in magnitude to the annual GNP of all the countries together and the IMF alone was receiving net transfers of 0.7 US$ billion a year from these countries between 1986 and 1990 (UNDP 1992:46). Debt servicing represented 25% (weighted mean) of the value of exports in 1990 and nearly 83% of GNP per capita amongst low income economies as a whole (World Bank 1992:264 Table 24). The debt burden on developing countries continues to siphon off as much as US$ 170 billion a year (UNDP 1991:79). Relatively small concessions or debt swaps for human resource development could therefore have a major impact on national budgetary allocations in a number of the most indebted countries.
By contrast global military spending is falling after a long period of rapid growth as the cold war comes to an end. In both developed and developing countries military expenditure appears to have been shrinking at about 3 % a year potentially releasing large amounts of resources for other purposes. Unfortunately this trend is not yet observable in many of the poorest countries in Asia and Sub-Saharan Africa (UNDP 1992:85) and it has not been uncommon to find that military expenditure has been rising much faster than the national budget as a whole. There remain very wide disparities in the relationships between military and social sector expenditure - in some states military expenditure is between two and five times social sector spending (e.g. Somalia, Nicaragua, Ethiopia, Pakistan). In others it may be less than one fifth (e.g. Botswana, Ghana, Mexico and Costa Rica). The ratio of soldiers to teachers varies over a similar range (UNDP 1992:87). Paradoxically countries that spend a lot on the military (more than 4% of GNP) receive approximately twice as much Official Development Assistance per capita as those that are low spending (less than 2% GNP) (UNDP 1992:44).
Some defence spending is of course fully justified. More than 30 developing countries were involved in armed conflicts in the late 1980's with the effects often spreading well beyond their borders. In those countries most severely affected there are likely to have been substantial negative effects on GDP growth and on the level of non-defence related public sector spending. A recent study argues that 21 out of 53 African states have experienced war as one of the largest factors in suppressing economic growth, comparable only to the effects of decline in the terms of trade. This has resulted in a decline in GDP growth regionally from a probable 5-6% to an actual 2-3% (i.e. below the average rate of population growth, representing a per capita reduction in GDP in many cases (Green 1991)).
However, low allocations of expenditure on primary education do not seem to be simply linked to relatively high levels of indebtedness or defence spending (Colclough with Lewin 1993:18). The mean value of defence spending as a proportion of GNP in those developing countries with primary gross enrolment ratios (GERs) of less than 90 and GNP per capita of less than US$ 2000 in 1986 was substantially lower than the mean for all developing countries with GNP per capita below US$ 2000. And the levels of indebtedness of those countries with GERs below 90 were similar to the mean for all countries in the group.
Thus, though the proposition that high levels of debt servicing and defence spending are related to lower levels of educational investment is plausible, it appears that the chain of causality is more complex than a simple linear relationship. It remains consistent to argue that, in particular cases, the problem of insufficient resources for education may indeed result from excessive allocations to the military beyond reasonable need, and/or levels of indebtedness that reduce the resources available to governments to levels insufficient to allow effective implementation of educational development policy.
There has been a considerable debate on the extent to which structural adjustment programmes have contributed to diminutions in social sector spending in general and for education in particular, and whether Adjustment with a Human Face" (Cornia, Jolly and Stewart 1987) - a response to concerns with the impact of structural adjustment programmes on social welfare - has led to some protection for investment in social sector programmes.
Structural adjustment programmes are broadly intended to support the ordered transition of economies experiencing changed external conditions (oil price shocks, high interest rates, exchange rate fluctuations, deteriorating terms of trade etc.) to new points of budgetary equilibria and to create the conditions for economic growth. About 70 countries had received over 200 adjustment loans by the end of 1 990.
Recently the balance has shifted in favour of adjustment loans targeted on particular sectors. Most of the loans were to low income countries in Sub Saharan Africa and to highly indebted middle income countries. The policy conditionality associated with most of these loans carries four main implications for educational investment. Public sector recurrent and capital spending is usually constrained to reduce budget deficits. Wage restraint and public sector establishment rationalisation is usually required of public services. Reductions in public subsidies and the recovery of costs are encouraged. Most recently social policy conditionalities have been introduced into to attempt to protect the most vulnerable groups from the impact of adjustment policies (Noss 1991:2).
Recent contributors to the debate on the impact of structural adjustment include Stewart (1991a), Noss (1991), and Sahn (1992) and contributions to special issues of the IDS Bulletin (1989 Vol 20 Nol) and World Development (1991 Vol 19 No 12). Stewart argues that adjustment policies have not had the desired effects of restoring economic growth and that the balance of the experience was "undoubtedly negative (Stewart 1991 b: 1848). In both Latin America and Sub Saharan Africa per capita income and investment declined and inflation accelerated. Moreover, although there was a variety of experience among adjusting countries, on balance government per capita spending declined. As a result social sector spending per capita declined by 26% in Africa and 18% in Latin America between 1980 and 1985. In a sample of 34 countries 60% of those which received structural adjustment loans experienced declines in educational expenditure per capita, whilst the majority of those that did not receive such loans experienced increases (Kakwani, Makonnen and Van der Gaag 1989).
There is some evidence that primary education expenditure as a whole may have been protected in some Sub Saharan African countries. Its share of total educational spending appears to have increased more frequently than it decreased (Berstecher and Carr-Hill 1990) but, where population growth was high, per capita expenditure may still have been falling. Partly as a result of cost recovery strategies being pursued, parental expenditure per primary school child appears to have increased in some countries to reach 7-20% of GNP per capita in Zambia, Mali, Sierra Leone and Togo (Jespersen 1991).
More generally Stewart argues that in many countries stabilisation and adjustment policies in combination with other factors have had an adverse impact on the poorest slowing and sometimes reversing progress in educational development. Thus in the first period of adjustment in the Philippines poverty increased substantially and educational expenditure per child fell significantly. Despite this it seems that some countries have succeeded in combining adjustment, growth and social progress (e.g. Indonesia) and others have been able to sustain social progress during a period of adjustment in the absence of much growth (e.g.
Noss's comprehensive review of the impact of adjustment on education details the analytic problems which make it difficult to reach simple conclusions and cites a recent UNDP report which argues that "problems of data and methodology have thus far been so severe as to preclude any systematic evaluation of the social impacts of adjustment programmes" (shapelier and Tabatabai 1989). However, this has not prevented many from trying. As early as 1984 Hicks and Kubisch explored the effects of consecutive year reductions in government expenditure on social sector spending in 37 countries and concluded that it suffered less than other sectors. They noted large differences between cases in their sample and recognised the limits of its representativeness. This analysis suffers from being insensitive to longer term and cumulative effects that may result from reduced government expenditure under conditions of austerity and adjustment (Lewin 1987:57) social sector spending is likely to be difficult to reduce rapidly since it is concentrated in salaries, the effects of adjustment may only become apparent in the medium term as salaries are eroded by inflation and fewer new staff are hired.
Vulnerability coefficients (the ratio of percentage change in educations share to percentage change in total government expenditure) can be used to indicate whether education is more or less protected than other sectors. For Guinea this coefficient was 0.64 between 1986 and 1989 (real educational spending fell by 25% but the government budget fell by 40% and education was relatively protected); by contrast for Malawi over the period 1982-88 it was 5.5 (government spending fell by 3.3% but educational spending fell by 17.4% and education appears to have been more vulnerable than other sectors). Cornia, Jolly and Stewart (1987) present data suggesting that during recession education has suffered more than other sectors and is therefore more vulnerable though this study uses data that pre-date most structural adjustment programmes.
Amongst the recent studies reviewed by Noss (1991) on the impact of adjustment on education Gallagher (1990) has compared allocations to education amongst fiscally distressed (adjusting) and other (non-adjusting) developing countries and Sahn has explored changes in the share of education of the government budget before and after the first World Bank adjustment loans. Neither are able establish systematic effects though Gallagher concludes that reductions in social sector spending are associated with slower economic growth. Conversely Kakwani, Makonnen and Gaag (1990) and a recent World Bank study (World Bank 1990) associate adjustment directly with declining resources: these studies suggest the share of the public budget and GDP allocated to education increased in all country groups after 1980 except those that experienced intense adjustment.
In a later paper Sahn (1992) restates his argument that there is no pattern of increase or decrease in real levels of social sector spending before and after adjustment. This study is based on unweighted country statistics of a sample of 22 Sub Saharan African countries in the 1980's; it fails to support predictions of widespread negative effects of adjustment. It appears to demonstrate that educational expenditures increased after structural adjustment as a percentage of discretionary government expenditure in 6 cases (e.g. Ghana increased from 20.5% to 23%, Kenya from 19.3% to 21.7%) and fell in 10 (e.g. Sierra Leone 16.6% to 9.9°/0, Nigeria 9.4% to 7.4%). In about half the cases the changes were very small. Real expenditures per child may have behaved very differently to this especially where significant devaluation has occurred (Nigeria, Ghana, Sierra Leone) and where relationships between total government expenditure and total government discretionary expenditure have varied, to name just two complicating factors. Sahn (1992) concludes by suggesting that there is no compelling evidence that structural adjustment of itself worsens provision of social services; rather deterioration is a chronic problem in failing economies which are those most likely to require adjustment programmes. Noss (1991) also takes the view that though there is correlation between adjustment programmes and reductions in public expenditure - and thus social sector provision - causal relationships are poorly understood and analysis is extremely complex.
Figure 1: Educational Expenditure Before and After Structural Adjustment
Education Expenditure as % of Total Discretionary Government Expenditure
Source: based on data in Sahn [1992: Table 7, p 686]
The ideas of Adjustment with a Human Face developed in the mid 1980's were designed to protect vulnerable groups from the adverse effects of adjustment. In summary (Van der Hoeven 1991) these consisted of including in the adjustment process:
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more expansionary macroeconomic policies aim at sustaining levels of output, investment, and human needs satisfaction over the adjustment period: sectoral policies aimed at restructuring within the productive sector to strengthen employment and income-generating activities and raise productivity amongst low-income groups: the use of mesopolicies on taxation, government expenditure, foreign exchange and credit to influence the distribution of income and resources: improvements in the equity and efficiency of social sector expenditure through public expenditure restructuring: compensatory programs to protect basic health and nutrition of low-income groups; monitoring of living standards, health and nutrition: integrating adjustment policies with longer term visions which take into account economic, human, sociological and ecological contexts. |
Though these ideas have begun to appear more frequently in the discussion of adjustment programmes and attempts have been made in some cases to incorporate them, progress in this direction appears to have been slow. Stewart (1991 b: 1861) judges that though acknowledgement of the importance of protecting the poorest groups is evident in recent negotiations there is little evidence that macroeconomic policies of international financial institutions have been modified with this in mind. What modifications there have been, have tended to be add-one which are marginal to the main thrust of policy. Reductions in food subsidies, the introduction of user charges, and price decontrol remain central features of most adjustment programmes, and these have not been complemented with adequate safeguards for the poorest.
Planning for austerity and under conditions of adjustment is unlikely to be simply the opposite of planning for growth. There are a range of organisational, procedural, political and psychological reasons why this is so (Lewin 1987:88). The consequences of austerity and of adjustment programmes designed to restructure public spending to accommodate new conditions can be broadly classified into seven propositions. These are:
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Pressure to reduce public sector spending as a whole increases, with serious consequences for social sector and education spending since this is one of the largest single budgetary items in many countries. Reallocation of expenditure within the education sector to favour salary recurrent expenditure at the expense of non-salary recurrent and capital spending occurs in both planned and unplanned ways. Reallocation between educational levels (primary, secondary, tertiary) takes place for reasons of budgetary expediency as much as a rational response to planned needs and developmental benefits. Concentration of government support on formal rather than non-formal educational spending increases. Emphasis grows on cost reducing: reforms, which act to reduce the unit costs per child, and is reflected in increased pupil teacher ratios and declining salaries. Greater stress is placed on cost recovery schemes and more private financing to reduce public expenditure on education. Short term considerations and budgetary constraints are overemphasised at the expense of medium and long term concerns in decision making.: |
The dimensions of these different but inter-related possible outcomes have been explored in some detail in Lewin (1987:54-87). As might be expected, evidence that one or more of these tendencies has accompanied economic austerity programmes is not difficult to find for specific countries over a particular time scale. Thus, as is reported above, the vulnerability of educational spending in some countries has been high (Noss 1991:24). Capital expenditure has declined in many of the poorest developing countries with an increasing amount financed by donors; non-salary recurrent expenditure has also declined, often to derisory levels (Lewin with Berstecher 1989:60). Higher education appears to have been relatively protected in some cases - in Costa Rica between 1980 and 1986 primary allocations fell to 65% of their 1980 value and those for higher education to only 90% (Noss 1991:28). Data on non-formal expenditures by governments are notoriously difficult to obtain. There are however very few examples where ministries of education under financial stress appear have explicitly increased their commitment in this area. Salary levels of teachers have fallen widely, especially in Africa (Tibi 1990). Cost recovery schemes, which include the levying of fees, voluntary contributions and encouragement of private schooling are widespread with many consequences for equity (Lewin with Berstecher 1989:63-71). And "cultures of cuts" in public sector organisations, with the various symptoms of crisis management, are not unrelated to the emergence of good government as a development priority in many countries as administrative capacity decays.
Charting the mechanisms through which such changes come about is far more difficult than demonstrating the existence of trends in particular countries which are consistent with the propositions. This is because many factors will be specific to the social and economic conditions of each country, and the impact of adjustment programmes will depend on the nature of the adjustment that is planned, and the details of how it is implemented. And not all the tendencies identified necessarily have adverse consequences for development. For example, whether shifts towards or away from higher education support are developmentally desirable will depend at a minimum on what the existing balance is, the ratio of unit costs at different levels, the efficiency of different types of institution, and the strength of demand for educationally qualified staff at different levels.
Stewart (1991 b: 1849) may be right to argue that it is inappropriate to adopt a "conterfactual approach to assessments of the impact of changes associated with austerity and adjustment (where actual developments are compared with what might have happened if no adjustment had taken place) since, from the point of view of effects on human conditions, it is actual developments that are significant. If deterioration has occurred, development has not taken place. If changes of the types listed have taken place, and where these have not widened access, increased efficiency, and maintained educational quality, there is a prima facie case for assistance that might lessen the deleterious impact of such changes.
One way of approaching this set of problems raised by austerity and adjustment for educational investment and international assistance is to explore educational policy options that can respond to austerity which consciously seek to minimise effects which erode the quantity and quality of educational investment. Work initiated for the World Conference on Education for All (Colclough and Lewin 1990) has been extended to provide a new analysis how this might be achieved. An operational definition of basic education provision is used that allows for the achievement of Gross Enrolment Rates of 100% and substantial reductions in drop-out rates and repetition. Policy reforms are applied which are cost saving, cost shifting and quality enhancing. These include various measures concerned with double shifting, class size, community assistance, higher education subsidies, expenditure on learning materials, teachers salaries, and repetition and drop out. In summary, using both aggregated and individual country level simulations, this work demonstrates that through selective use of educational reforms many countries could finance more efficient educational systems with broader access and improvements designed to enhance quality, without allocating disproportionate amounts of public resources to education. Reformed, relatively efficient systems with GERs of 100 or more, which allow for real improvements in the resources available to improve quality (e.g. for educational materials and for real increases in teacher's salaries) can be no more demanding on the public budget than expanded but inefficient systems without quality enhancements (Colclough with Lewin 1993).
The implications for educational assistance of the various trends outlined above are complex and many dimensioned. It is not simply the case that countries which do not succeed in providing adequate education to most of their populations are resource constrained in so doing. In some failure to achieve this is the result of conscious decisions to allocate resources for other purposes whether these be military, excessive levels of borrowing to sustain levels of public expenditure, or other preferred uses of public funds. This one issue stands out above all others in relation to the policy dialogue between donors and recipients. To what extent is failure to provide adequate access to educational services a function of resource constraints, cost constraints or relative neglect? This bears directly on the question of whether aid can contribute to improvements in those countries where many experience little or no access to schools and other educational services.
Some assessments therefore have to be made of the conviction with which educational development policy has been pursued and of the constraints which apply. A more detailed analysis of this problem is provided in Colclough with Lewin (1993) as it relates to educational investment at the first level. This illustrates how assessments can begin to be made. In principle this analysis suggests the value of examining public sector budgets in terms of levels of expenditure on education as a percentage of GNP, and expenditures per student as a percentage of GNP per capita. These can then be associated with the enrolment ratios achieved to judge an implied level of commitment to education and begin to indicate policy priorities. It can help distinguish cases that are resource constrained (where a relatively high proportion of GNP is already allocated) from those that are cost constrained (where unit costs at primary are a relatively high proportion of GNP per capita), and from those that may be both. The case for external assistance may be strongest where resources are constrained. Cost constraints imply the need for cost reducing reforms which may also benefit from some types of external assistance directed towards this end. Where neither resources nor costs are constrained the case for assistance is weakest since restricted access is evidently a reflection of domestic priorities which then becomes an issue to be taken up in the policy dialogue.
The final point to stress is that in the medium term most of the costs, at least at primary and secondary level will remain recurrent and relate directly to teachers' salaries. The problems of improving access to schooling and enhancing its quality are inescapably recurrent in nature and this adds a dimension to the debate concerning appropriate assistance. Donors have been unwilling to commit themselves to recurrent support since it seems to represent a potentially open ended commitment with a lower level of accountability than does capital and project aid. Where the basic costs of financing education are capable of domestic financing, as they are in most middle and upper income developing countries given appropriate political will, this is probably a sound policy. In low income countries, especially those with high population growth rates, low economic growth, and considerable unsatisfied demand for education amongst the poorest groups, the situation is more complex. Excessive emphasis on capital projects builds up recur rent burdens that may not be sustainable and compromises the effectiveness of the assistance that is given. Project aid with a very large capital element may therefore exacerbate deficits in recurrent finance which will not resolve themselves.
There is therefore a compelling case for considering general forms of recurrent budgetary support alongside more conventional capital aid and project assistance in those countries which are both committed to educational development and demonstrably incapable of financing its provision. This need not be an open ended commitment in so far as it can be phased in and out over negotiated time scales. Neither need it be any less accountable than other types of assistance if an appropriate policy dialogue occurs which agrees the conditions under which it might be provided. Without support of this kind in some countries aid may indeed result in perverse effects which undermine the capacity to deliver general educational services to the majority of the population equitably. This may occur both because of increasing and unsustainable burdens on recurrent expenditure which result from an accumulation of aid financed projects over time, and because such projects may attract critical staff and resources away from the national government and deplete the capacity for efficient educational administration of the system as a whole.
In conclusion, what pertains in particular countries is a product of a combination of the willingness to support education in competition with other sectors and the ability to do so, especially where austerity has become a recurrent feature of public expenditure bargaining (Lewin 1987). Where there is evidence of low proportional allocations the temptation is to conclude that the first task is to transform the policy making environment so that espoused priorities are reflected in actual allocations. The only exceptions will be where there really are irreducible forward commitments that prevent this. Even in these cases the two most commonly cited obstacles - debt servicing and defence needs - are open to scrutiny to see whether there really is room to manoeuvre. Where costs are high relative to countries at comparable levels of economic development, and this is responsible for limited access, the opportunity exists to explore the extent to which efficiency reforms could reduce unit costs and allow greater access.
