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A Benefit Incidence Analysisof Public Spending on Education in PakistanUsing PSLM Data


Author Info

  • Zahid Asghar

    (National Institute of Banking and Finance (NIBAF), State Bank of Pakistan, Islamabad, Pakistan. The views expressed in this paper are those of the author and do not necessarily reflect the views of the State Bank of Pakistan and/or its subsidiaries.)

  • Mudassar Zahra

    (Quaid-i-Azam University, Islamabad, Pakistan.)


Education is one of the most important means of economic development, and there is consensus among policymakers that it is better to be educated than not. The debate on education is not, therefore, whether it is good or bad, rather it centers on whether the state should intervene in its provision. Public provision of education at the school level is generally considered one of the most important investments for creating social opportunities to help the wider population actively participate in various economic activities. This study investigates whether public spending on education in Pakistan is pro-poor at various levels of schooling. We find that public spending at the primary and secondary level is progressive, while higher education spending is regressive. These results hold at the national and provincial level. Based on these findings, we recommend that the government increase its spending on primary, secondary, and technical education. Higher education, however, should be provided on merit, and the private sector should be encouraged to provide high-quality education.

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Bibliographic Info

Article provided by Department of Economics, The Lahore School of Economics in its journal Lahore Journal of Economics.

Volume (Year): 17 (2012)
Issue (Month): 2 (July-Dec)
Pages: 111-136

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Handle: RePEc:lje:journl:v:17:y:2012:i:2:p:111-136

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Keywords: Education; economic; development; Pakistan.;

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  1. Hyun H. Son, 2006. "Assessing the pro-poorness of government fiscal policy in Thailand," Working Papers 15, International Policy Centre for Inclusive Growth.
  2. Rosario G. Manasan & Janet S. Cuenca & Eden C. Villanueva-Ruiz, 2008. "Benefit Incidence of Public Spending on Education in the Philippines," Development Economics Working Papers 22660, East Asian Bureau of Economic Research.
  3. Manasan, Rosario G. & Cuenca, Janet S. & Villanueva-Ruiz, Eden C., 2008. "Benefit Incidence of Public Spending on Education in the Philippines," Discussion Papers DP 2008-08, Philippine Institute for Development Studies.
  4. Hyun H. Son, 2006. "Assessing the “Pro-Poorness†of Government Fiscal Policy in Thailand," Public Finance Review, , vol. 34(4), pages 427-449, July.
  5. Heltberg, Rasmus & Simler, Kenneth & Tarp, Finn, 2003. "Public spending and poverty in Mozambique," FCND briefs 167, International Food Policy Research Institute (IFPRI).
  6. repec:lje:journl:v:2:y:2007:i:2:p:27-48 is not listed on IDEAS
  7. Easterly, William, 2007. "The White Man's Burden: Why the West's Efforts to Aid the Rest Have Done So Much Ill And So Little Good," OUP Catalogue, Oxford University Press, number 9780199226115, September.
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