Equity in Educational Expenditures: Can Government Subsidies Help?
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 sub...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, D.C.
2013
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| Online Access: | http://hdl.handle.net/10986/14297 |
| Summary: | 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 from Zambia, 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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