Articles · Vol. 2 No. 1 (2004): Journal of Higher Education in Africa · Pages 135-148

5 - Should There Be a General Subsidy for Higher Education in Developing Countries?

David E. Bloom & Jaypee Sevilla

  • David E. Bloom
    David E. Bloom
    David E. Bloom is Clarence James Gamble Professor of Economics and Demography, Harvard University, Building 1, Floor 11, 655 Huntington Ave., Boston, MA 02115, USA; e-mail: dbloom@hsph.harvard.edu.
    Their articles →
  • Jaypee Sevilla
    Jaypee Sevilla
    Jaypee Sevilla is Assistant Professor of International Health Economics, Harvard University, Building 1, Room 1210-D, 665 Huntington Avenue, Boston, MA 02115, USA; e-mail: jsevilla@hsph.harvard.edu.
    Their articles →
Vol. 2 · 2004 No. 1 Journal of Higher Education in Africa JHEA

Abstract

The view that developing countries ought to offer general subsidies for higher education has many supporters. We use traditional economic logic to specify the conditions under which such an investment policy would promote a so- cially efficient allocation of resources. We identify three necessary conditions. First, the net social benefit from the investment must be positive. Second, pri- vate actors must have insufficient ability or incentive to undertake the socially optimal level of investment. Finally, the investment must generate more net social benefits than competing uses of public funds. We reason that the first condition is likely to be satisfied, the second might not, and third is even more questionable. Without empirical evidence to the contrary, we therefore reason that there is no clear-cut efficiency reason for a general subsidy for higher education in developing countries.

 

Keywords

Higher Education Developing Countries investment socioeconomic

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Author Biographies

  • David E. Bloom

    David E. Bloom is Clarence James Gamble Professor of Economics and Demography, Harvard University, Building 1, Floor 11, 655 Huntington Ave., Boston, MA 02115, USA; e-mail: dbloom@hsph.harvard.edu.

  • Jaypee Sevilla

    Jaypee Sevilla is Assistant Professor of International Health Economics, Harvard University, Building 1, Room 1210-D, 665 Huntington Avenue, Boston, MA 02115, USA; e-mail: jsevilla@hsph.harvard.edu.

References

  1. Birdsall, N. (1996). Public spending on higher education in developing countries: Too much or too little? Economics of Education Review 15(4), 407-19.
  2. Parfit, D. (1984). Reasons and persons. New York: Oxford University Press. Schultz, T. P. (2001, October) Higher education in Africa: Monitoring efficiency and improving equity. Presentation prepared for the Conference on International Higher Education and African Development, Yale Center for International Area Studies, New Haven, Connecticut.
  3. Task Force on Higher Education (2000). Higher education in developing countries: Peril and promise. World Bank and UNESCO. Retrieved December 15, 2003, from http://www.tfhe.net/report/readreport.htm.