The Household Distribution Of Government Services For Agriculture And Education In Peninsular Malaysia In 1974

The paper reports on several results from a comprehensive study of the household incidence of public expenditure in Peninsular Malaysia in 1974. The results for education show a pro‐poor distribution of expenditure when measured as a share of household income. Using however the criterion of each according to his needs (that is the number of school‐age children per household) reverses this outcome. In agriculture, because of the importance of land settlement, benefits from public expenditure distribute predominantly in favor of the poor. The research differs from the usual study of this kind in that individual government outputs such as school years, or fertilizer loans, were defined, and in the case of education their unit costs estimated and their distribution across households measured. In the case of education, both the costs of services from capital and the households’ out‐of‐pocket educational costs were added to the current subsidies. As one consequence, it was seen that total expenditure for education in Malaysia exceeds one‐eighth of GNP, nearly double the conventional estimate. Equally important, for the poor the burden of private costs for education even within a public system were seen to be very high. The contrasts between the strong results for education, a broad based social service, and the less conclusive results for agriculture, an economic service which impacts directly on production, were instructive in suggesting the limitations of such research in measuring the effects of government budget activity on distribution.