Enhancing the Public Provision of Education: The Economics of Education Reform in Developing Countries

The paper argues that a comprehensive evaluation of education reform in particular in developing countries needs considering the triangle’ quality-quantity-equity of educational policies in the short, medium and long term in a broader context than the education system itself. There is no simple “recipe” for improving quality and internal and external efficiency in the public education system but some general results are found. Firstly, that the elasticity of the return of the reform is decreasing with the size of increased budget, making anti-economical the reliance on a reform consisting in more resources only to significantly improve the poor performance of the system. Indeed, very modest target set to improve the system performance, would require -without more sophisticated policies- huge increments in budget with a poor return. In this sense the paper investigate the capacity of focused policies to improve the productivity of the education expenditure, in particular toward basic education or the disadvantaged students. Secondly, the timing of the reform matters: most policies with very different return in the long term are almost undistinguishable by their short run merits, and policies that are more productive in the short term may be less convenient than competing alternatives in the longer term, so the actual policy may be influenced by the time horizon chosen by the policy makers. Thirdly, effects of the reform are accumulative, and to evaluate the reform by modest, in general, short run merits is myopic and may put the reform at risk of reversion or to deter future investment in the sector.