The allocation of resources to education in less developed countries

Abstract

In the last few years, many less developed countries have suddenly and apparently to their surprise found themselves with too many (relative to the absorptive capacity of their economies) rather than too few workers with intermediate educational attainments. Yet, even as surpluses of educated workers grow larger and larger, the school systems continue to expand and the people continue to demand education. Elsewhere,’ we have sought to understand the persistence of a high demand for educatic;n in countries characterized by a substantial surplus of educated labor. In this paper, we construct a political model of the allocation of resources to education in less developed countries to try to explain why educational systems continue to grow in the face of such surpluses. The specific plan of the paper is as follows. We begin in sect. 2 by briefly summarizing some of the available evidence on educational and labor market phenomena in less developed countries. In sect. 3, we offer a political model whereby more schools are constructed so long as the private demand for education exceeds the supply. Sect. 4 describes the path of adjustment toward and nature of equilibrium as predicted by our model. Finally, we conclude by considering some welfare and policy implications of the analysis. At this point, we remark that the political model presented herein is in no way limited in applicability to the less developed countries. Although not within the