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Equity in educational expenditures : can government subsidies help?

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  • Das, Jishnu

Abstract

When there are externalities across households, governments can improve economic outcomes by equitably subsidizing education. But this chain of causality works only if (1) allocated resources reach the final recipients, and (2) equity in public subsidies translates directly into equity in total educational expenditures, including private spending at the household level. Using a unique data set fromZambia, the author shows that whether these conditions are met depends on the specific schemes used to allocate resources as well as the exact form of the subsidies. First, subsidies allocated through clear guidelines and legislated rules reached the final recipients, but those allocated at the discretion of province and educational offices did not. Second, even those components of subsidies that were progressive (in that the share of total subsidies for the poor was greater than the share for the non-poor) had no effect on inequality in total educational expenditures due to the crowding-out of household spending.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 3249.

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Date of creation: 01 Mar 2004
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Handle: RePEc:wbk:wbrwps:3249

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Related research

Keywords: Economic Theory&Research; Environmental Economics&Policies; Teaching and Learning; Decentralization; Payment Systems&Infrastructure; Teaching and Learning; Economic Adjustment and Lending; Health Economics&Finance; Economic Theory&Research; Environmental Economics&Policies;

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  1. Anne Case & Angus Deaton, 1999. "School Inputs And Educational Outcomes In South Africa," The Quarterly Journal of Economics, MIT Press, vol. 114(3), pages 1047-1084, August.
  2. Jishnu Das & Stefan Dercon & James Habyarimana & Pramila Krishnan, 2004. "When Can School Inputs Improve Test Scores?," CSAE Working Paper Series 2004-25, Centre for the Study of African Economies, University of Oxford.
  3. Paul Glewwe & Hanan Jacoby, 1994. "Student Achievement and Schooling Choice in Low-Income Countries: Evidence from Ghana," Journal of Human Resources, University of Wisconsin Press, vol. 29(3), pages 843-864.
  4. Ablo, Emmanuel & Reinikka, Ritva, 1998. "Do budgets really matter? - evidence from public spending on education and health in Uganda," Policy Research Working Paper Series 1926, The World Bank.
  5. Reinikka, Ritva & Svensson, Jakob, 2001. "Explaining Leakage of Public Funds," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  6. Galor, Oded & Zeira, Joseph, 1988. "Income Distribution and Macroeconomics," MPRA Paper 51644, University Library of Munich, Germany, revised 01 Sep 1989.
  7. Dilip Mookherjee & Pranab K. Bardhan, 2000. "Capture and Governance at Local and National Levels," American Economic Review, American Economic Association, vol. 90(2), pages 135-139, May.
  8. Smith, Richard J & Blundell, Richard W, 1986. "An Exogeneity Test for a Simultaneous Equation Tobit Model with an Application to Labor Supply," Econometrica, Econometric Society, vol. 54(3), pages 679-85, May.
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  10. Frye, Timothy & Shleifer, Andrei, 1997. "The Invisible Hand and the Grabbing Hand," American Economic Review, American Economic Association, vol. 87(2), pages 354-58, May.
  11. Hanushek, Eric, 1971. "Teacher Characteristics and Gains in Student Achievement: Estimation Using Micro Data," American Economic Review, American Economic Association, vol. 61(2), pages 280-88, May.
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Cited by:
  1. Linden, Leigh L. & Shastry, Gauri Kartini, 2012. "Grain inflation: Identifying agent discretion in response to a conditional school nutrition program," Journal of Development Economics, Elsevier, vol. 99(1), pages 128-138.
  2. Margaret Koziol & Courtney Tolmie, 2010. "Using Public Expenditure Tracking Surveys to Monitor Projects and Small-Scale Programs : A Guidebook," World Bank Publications, The World Bank, number 2502, October.
  3. Reinikka, Ritva & Svensson, Jakob, 2011. "The power of information in public services: Evidence from education in Uganda," Journal of Public Economics, Elsevier, vol. 95(7), pages 956-966.

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