The Political Economy of Public Spending on Education, Inequality, and Growth
Public provision of education has often been perceived as universal and egalitarian, but in reality it is not. Political pressure typically results in incidence bias in favor of the rich. The author argues that the bias in political influence resul...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2003/11/2811853/political-economy-public-spending-education-inequality-growth http://hdl.handle.net/10986/17900 |
| Summary: | Public provision of education has often
been perceived as universal and egalitarian, but in reality
it is not. Political pressure typically results in incidence
bias in favor of the rich. The author argues that the bias
in political influence resulting from extreme income
inequalities is particularly likely to generate an incidence
bias, which we call social exclusion. This may then lead to
a feedback mechanism whereby inequality in the incidence of
public spending on education breeds higher income
inequality, thus generating multiple equilibria: with social
exclusion and high inequality; and with social inclusion and
relatively low inequality. The author also shows that the
latter equilibrium leads to higher long-run growth than the
former. An extension of the basic model reveals that
spillover effects among members of social groups
differentiated by race or ethnicity may reinforce the
support for social exclusion. |
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