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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Main Author:	Gradstein, Mark
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2014
Subjects:	EDUCATIONAL FINANCE PUBLIC EXPENDITURES FOR EDUCATION INCOME INEQUALITIES SOCIAL ISOLATION SPILLOVER EFFECTS RACIAL GROUPS ETHNIC GROUPS AGRICULTURE ASSET INEQUALITY AVAILABLE DATA AVERAGE INCOME AVERAGE INCOME GROWTH AVERAGE INCOME GROWTH RATE AVERAGE INCOME LEVEL CAPITAL INVESTMENT CONSIDERABLE DIFFERENCES DATA SET DEMOCRACY DEVELOPING COUNTRIES DEVELOPMENT ECONOMICS DEVELOPMENT REPORT DISPOSABLE INCOME DISTRIBUTIONAL EFFECTS DISTRIBUTIONAL IMPLICATIONS DURABLE GOODS DYNAMIC ANALYSIS ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC REVIEW ECONOMIC REVIEW PAPERS ECONOMIC SURVEYS ECONOMICS OF EDUCATION EDUCATIONAL RESOURCES EMPIRICAL ANALYSIS EMPIRICAL EVIDENCE ENDOGENOUS GROWTH EQUAL ACCESS EQUILIBRIUM ANALYSIS EXPECTED UTILITY GINI COEFFICIENT GROWTH EFFECT GROWTH RATE GROWTH RATES GROWTH THEORIES HIGH INEQUALITY HOUSEHOLD CONSUMPTION HOUSEHOLD INCOME HUMAN CAPITAL INCOME INCOME DISTRIBUTION INCOME DISTRIBUTIONS INCOME INEQUALITY INCOME INEQUALITY DATA INCOMES INEQUALITY INHERITANCE INTERGENERATIONAL MOBILITY LIFE EXPECTANCY LONG RUN LONG-RUN GROWTH LOW INEQUALITY MACROECONOMIC IMPLICATIONS MARGINAL EFFECT MEDIAN INCOME MERITOCRACY MIDDLE CLASS MULTIPLE EQUILIBRIA NEGATIVE EFFECT OLD ISSUES POLICY RESEARCH POLITICAL ECONOMY POLITICAL EQUILIBRIUM POLITICAL FORCES POLITICAL INFLUENCE POLITICAL SUPPORT POLITICAL SYSTEM POOR COUNTRIES POOR HOUSEHOLDS POOR PEOPLE POPULATION GROUPS POVERTY REDUCTION PRIMARY EDUCATION PRODUCTION FUNCTION PRODUCTION INPUTS PUBLIC EDUCATION PUBLIC EXPENDITURE PUBLIC FUNDS PUBLIC GOOD PUBLIC GOODS PUBLIC INSTITUTIONS PUBLIC INTERVENTION PUBLIC PROVISION PUBLIC SERVICES PUBLIC SPENDING RELATIVE IMPORTANCE RENT SEEKING RESOURCE ALLOCATION RURAL AREAS SIGNIFICANT EFFECT SIGNIFICANT FACTOR SOCIAL EXCLUSION SOCIAL GROUP SOCIAL GROUPS SOCIAL INCLUSION SOCIAL SERVICES STANDARD DEVIATION TERTIARY EDUCATION UNEQUAL SOCIETIES URBAN POPULATION UTILITY FUNCTION VOTERS WAGES WEALTH
Online Access:	http://documents.worldbank.org/curated/en/2003/11/2811853/political-economy-public-spending-education-inequality-growth http://hdl.handle.net/10986/17900

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recordtype	oai_dc
spelling	okr-10986-179002021-04-23T14:03:40Z The Political Economy of Public Spending on Education, Inequality, and Growth Gradstein, Mark EDUCATIONAL FINANCE PUBLIC EXPENDITURES FOR EDUCATION INCOME INEQUALITIES SOCIAL ISOLATION SPILLOVER EFFECTS RACIAL GROUPS ETHNIC GROUPS AGRICULTURE ASSET INEQUALITY AVAILABLE DATA AVERAGE INCOME AVERAGE INCOME GROWTH AVERAGE INCOME GROWTH RATE AVERAGE INCOME LEVEL CAPITAL INVESTMENT CONSIDERABLE DIFFERENCES DATA SET DEMOCRACY DEVELOPING COUNTRIES DEVELOPMENT ECONOMICS DEVELOPMENT REPORT DISPOSABLE INCOME DISTRIBUTIONAL EFFECTS DISTRIBUTIONAL IMPLICATIONS DURABLE GOODS DYNAMIC ANALYSIS ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC REVIEW ECONOMIC REVIEW PAPERS ECONOMIC SURVEYS ECONOMICS OF EDUCATION EDUCATIONAL RESOURCES EMPIRICAL ANALYSIS EMPIRICAL EVIDENCE ENDOGENOUS GROWTH EQUAL ACCESS EQUILIBRIUM ANALYSIS EXPECTED UTILITY GINI COEFFICIENT GROWTH EFFECT GROWTH RATE GROWTH RATES GROWTH THEORIES HIGH INEQUALITY HOUSEHOLD CONSUMPTION HOUSEHOLD INCOME HUMAN CAPITAL INCOME INCOME DISTRIBUTION INCOME DISTRIBUTIONS INCOME INEQUALITY INCOME INEQUALITY DATA INCOMES INEQUALITY INHERITANCE INTERGENERATIONAL MOBILITY LIFE EXPECTANCY LONG RUN LONG-RUN GROWTH LOW INEQUALITY MACROECONOMIC IMPLICATIONS MARGINAL EFFECT MEDIAN INCOME MERITOCRACY MIDDLE CLASS MULTIPLE EQUILIBRIA NEGATIVE EFFECT OLD ISSUES POLICY RESEARCH POLITICAL ECONOMY POLITICAL EQUILIBRIUM POLITICAL FORCES POLITICAL INFLUENCE POLITICAL SUPPORT POLITICAL SYSTEM POOR COUNTRIES POOR HOUSEHOLDS POOR PEOPLE POPULATION GROUPS POVERTY REDUCTION PRIMARY EDUCATION PRODUCTION FUNCTION PRODUCTION INPUTS PUBLIC EDUCATION PUBLIC EXPENDITURE PUBLIC FUNDS PUBLIC GOOD PUBLIC GOODS PUBLIC INSTITUTIONS PUBLIC INTERVENTION PUBLIC PROVISION PUBLIC SERVICES PUBLIC SPENDING RELATIVE IMPORTANCE RENT SEEKING RESOURCE ALLOCATION RURAL AREAS SIGNIFICANT EFFECT SIGNIFICANT FACTOR SOCIAL EXCLUSION SOCIAL GROUP SOCIAL GROUPS SOCIAL INCLUSION SOCIAL SERVICES STANDARD DEVIATION TERTIARY EDUCATION UNEQUAL SOCIETIES URBAN POPULATION UTILITY FUNCTION VOTERS WAGES WEALTH 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. 2014-04-17T17:13:52Z 2014-04-17T17:13:52Z 2003-11 http://documents.worldbank.org/curated/en/2003/11/2811853/political-economy-public-spending-education-inequality-growth http://hdl.handle.net/10986/17900 English en_US Policy Research Working Paper;No. 3162 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English en_US
topic	EDUCATIONAL FINANCE PUBLIC EXPENDITURES FOR EDUCATION INCOME INEQUALITIES SOCIAL ISOLATION SPILLOVER EFFECTS RACIAL GROUPS ETHNIC GROUPS AGRICULTURE ASSET INEQUALITY AVAILABLE DATA AVERAGE INCOME AVERAGE INCOME GROWTH AVERAGE INCOME GROWTH RATE AVERAGE INCOME LEVEL CAPITAL INVESTMENT CONSIDERABLE DIFFERENCES DATA SET DEMOCRACY DEVELOPING COUNTRIES DEVELOPMENT ECONOMICS DEVELOPMENT REPORT DISPOSABLE INCOME DISTRIBUTIONAL EFFECTS DISTRIBUTIONAL IMPLICATIONS DURABLE GOODS DYNAMIC ANALYSIS ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC REVIEW ECONOMIC REVIEW PAPERS ECONOMIC SURVEYS ECONOMICS OF EDUCATION EDUCATIONAL RESOURCES EMPIRICAL ANALYSIS EMPIRICAL EVIDENCE ENDOGENOUS GROWTH EQUAL ACCESS EQUILIBRIUM ANALYSIS EXPECTED UTILITY GINI COEFFICIENT GROWTH EFFECT GROWTH RATE GROWTH RATES GROWTH THEORIES HIGH INEQUALITY HOUSEHOLD CONSUMPTION HOUSEHOLD INCOME HUMAN CAPITAL INCOME INCOME DISTRIBUTION INCOME DISTRIBUTIONS INCOME INEQUALITY INCOME INEQUALITY DATA INCOMES INEQUALITY INHERITANCE INTERGENERATIONAL MOBILITY LIFE EXPECTANCY LONG RUN LONG-RUN GROWTH LOW INEQUALITY MACROECONOMIC IMPLICATIONS MARGINAL EFFECT MEDIAN INCOME MERITOCRACY MIDDLE CLASS MULTIPLE EQUILIBRIA NEGATIVE EFFECT OLD ISSUES POLICY RESEARCH POLITICAL ECONOMY POLITICAL EQUILIBRIUM POLITICAL FORCES POLITICAL INFLUENCE POLITICAL SUPPORT POLITICAL SYSTEM POOR COUNTRIES POOR HOUSEHOLDS POOR PEOPLE POPULATION GROUPS POVERTY REDUCTION PRIMARY EDUCATION PRODUCTION FUNCTION PRODUCTION INPUTS PUBLIC EDUCATION PUBLIC EXPENDITURE PUBLIC FUNDS PUBLIC GOOD PUBLIC GOODS PUBLIC INSTITUTIONS PUBLIC INTERVENTION PUBLIC PROVISION PUBLIC SERVICES PUBLIC SPENDING RELATIVE IMPORTANCE RENT SEEKING RESOURCE ALLOCATION RURAL AREAS SIGNIFICANT EFFECT SIGNIFICANT FACTOR SOCIAL EXCLUSION SOCIAL GROUP SOCIAL GROUPS SOCIAL INCLUSION SOCIAL SERVICES STANDARD DEVIATION TERTIARY EDUCATION UNEQUAL SOCIETIES URBAN POPULATION UTILITY FUNCTION VOTERS WAGES WEALTH
spellingShingle	EDUCATIONAL FINANCE PUBLIC EXPENDITURES FOR EDUCATION INCOME INEQUALITIES SOCIAL ISOLATION SPILLOVER EFFECTS RACIAL GROUPS ETHNIC GROUPS AGRICULTURE ASSET INEQUALITY AVAILABLE DATA AVERAGE INCOME AVERAGE INCOME GROWTH AVERAGE INCOME GROWTH RATE AVERAGE INCOME LEVEL CAPITAL INVESTMENT CONSIDERABLE DIFFERENCES DATA SET DEMOCRACY DEVELOPING COUNTRIES DEVELOPMENT ECONOMICS DEVELOPMENT REPORT DISPOSABLE INCOME DISTRIBUTIONAL EFFECTS DISTRIBUTIONAL IMPLICATIONS DURABLE GOODS DYNAMIC ANALYSIS ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC REVIEW ECONOMIC REVIEW PAPERS ECONOMIC SURVEYS ECONOMICS OF EDUCATION EDUCATIONAL RESOURCES EMPIRICAL ANALYSIS EMPIRICAL EVIDENCE ENDOGENOUS GROWTH EQUAL ACCESS EQUILIBRIUM ANALYSIS EXPECTED UTILITY GINI COEFFICIENT GROWTH EFFECT GROWTH RATE GROWTH RATES GROWTH THEORIES HIGH INEQUALITY HOUSEHOLD CONSUMPTION HOUSEHOLD INCOME HUMAN CAPITAL INCOME INCOME DISTRIBUTION INCOME DISTRIBUTIONS INCOME INEQUALITY INCOME INEQUALITY DATA INCOMES INEQUALITY INHERITANCE INTERGENERATIONAL MOBILITY LIFE EXPECTANCY LONG RUN LONG-RUN GROWTH LOW INEQUALITY MACROECONOMIC IMPLICATIONS MARGINAL EFFECT MEDIAN INCOME MERITOCRACY MIDDLE CLASS MULTIPLE EQUILIBRIA NEGATIVE EFFECT OLD ISSUES POLICY RESEARCH POLITICAL ECONOMY POLITICAL EQUILIBRIUM POLITICAL FORCES POLITICAL INFLUENCE POLITICAL SUPPORT POLITICAL SYSTEM POOR COUNTRIES POOR HOUSEHOLDS POOR PEOPLE POPULATION GROUPS POVERTY REDUCTION PRIMARY EDUCATION PRODUCTION FUNCTION PRODUCTION INPUTS PUBLIC EDUCATION PUBLIC EXPENDITURE PUBLIC FUNDS PUBLIC GOOD PUBLIC GOODS PUBLIC INSTITUTIONS PUBLIC INTERVENTION PUBLIC PROVISION PUBLIC SERVICES PUBLIC SPENDING RELATIVE IMPORTANCE RENT SEEKING RESOURCE ALLOCATION RURAL AREAS SIGNIFICANT EFFECT SIGNIFICANT FACTOR SOCIAL EXCLUSION SOCIAL GROUP SOCIAL GROUPS SOCIAL INCLUSION SOCIAL SERVICES STANDARD DEVIATION TERTIARY EDUCATION UNEQUAL SOCIETIES URBAN POPULATION UTILITY FUNCTION VOTERS WAGES WEALTH Gradstein, Mark The Political Economy of Public Spending on Education, Inequality, and Growth
relation	Policy Research Working Paper;No. 3162
description	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.
format	Publications & Research :: Policy Research Working Paper
author	Gradstein, Mark
author_facet	Gradstein, Mark
author_sort	Gradstein, Mark
title	The Political Economy of Public Spending on Education, Inequality, and Growth
title_short	The Political Economy of Public Spending on Education, Inequality, and Growth
title_full	The Political Economy of Public Spending on Education, Inequality, and Growth
title_fullStr	The Political Economy of Public Spending on Education, Inequality, and Growth
title_full_unstemmed	The Political Economy of Public Spending on Education, Inequality, and Growth
title_sort	political economy of public spending on education, inequality, and growth
publisher	World Bank, Washington, DC
publishDate	2014
url	http://documents.worldbank.org/curated/en/2003/11/2811853/political-economy-public-spending-education-inequality-growth http://hdl.handle.net/10986/17900
_version_	1764438443155259392

The Political Economy of Public Spending on Education, Inequality, and Growth

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