This document summarizes an analysis of alternate forms of government intervention in education from an economist's perspective. It discusses the current state of intervention in Pakistan and analyzes the education systems of Finland, South Korea, and Singapore. Two alternate forms of intervention are proposed: full state funding of education modeled after South Korea, and state funding on merit and need basis like Singapore. Public-private partnerships are also recommended to refine the proposed models.

1. Alternate Forms of Government
Intervention in Education
An Economist’s Perspective
Pakistan Institute of Development Economics, Islamabad
Pakistan

2. Presented By
• Muhammad Yasir Anwar

3. Synopsis
• Rationale of the study
• Study methodology
• Current Forms of Government Intervention
• Analysis of Leading Foreign Education Systems
– Finland
– South Korea
– Singapore
• Alternate Forms of Government Intervention
• Data Analysis and Interpretation

4. SECTION I
Study Rationale and Methodology

5. Education Sector: Socio-economic Impact
• Five pillars of national development are:
– The family base
– The religious base
– The economic base
– The administrative base
– The educational base
• Education has immense impact on a socio-economic
development.
• Nations such as South Korea, Finland and Singapore have
aptly demonstrated the strong role of education in
national development.

6. Education: A Commodity
• From an economist’s perspective education is a
commodity of distinct nature.
• Like other commodities education is driven by gap
between supply and demand.
• Education represents a budding business area for private
entrepreneurs.
• However in light of the nation wide impact of education
government has to take helm affairs.
• “Give a man a fish and he will be happy for the day, teach
him how to fish and you have ruined a wonderful
business opportunity” does not apply to education.

7. Education: An Economic Perspective
• From an economical viewpoint state intervention is
necessary to ensure uniform cost and quality of
education for all income classes.
• State funding and regulations should be aimed at
financing and regulating both public and private
sector educational setups.
• Meritocracy has to be widely adopted and
implemented through state efforts
• Leading foreign education systems are based on
stringent state funding and regulatory frameworks.

8. Study Methodology
• Study conducted in three phases:
– Phase I: Current State of Government Intervention in Pakistan
– Phase II: Study of Leading Educational Systems from Across the
Globe
– Phase III: Proposition of Alternate Forms of Government
Intervention
• Focus on financial and monetary aspects/modes of
government intervention.
• Education systems of Finland, Singapore and South Korea
have been dissected.
• Alternate framework for intervention is based on the
analysis of fore stated foreign systems.

9. SECTION II
Current State of Government Intervention

10. Education Dilemma of Pakistan
• Boom in number of private sector educational
institutes has been witnessed in recent years.
• Despite this illiteracy rate is at par with severely
underdeveloped countries.
• Pakistan is home to the second largest population of
out of school children behind Nigeria.
• Education system suffers from chronic ethnic,
linguistic, social and economical divides.

11. Grey Areas in Education Sector
• Lack of grass root implementation of state responsibility
of providing free and compulsory education up to
secondary level as envisaged by Article 25-A Constitution
of Pakistan 1973.
• Lack of centralized and homogenized educational system.
• Low resource mobilization for development of
educational setups, bodies and legislation.
• Minimal percentage of GDP (2.7%) is being spent on
education which is overshadowed by defense and
recurrent state expenditures.
Ref. UNESCO et. al. 2007

12. Current Areas of Intervention
• The federal and four provincial governments are currently
intervening in the following areas of education:
– Educational Policy Making
– Curriculum Development
– Financial Planning and Resource Allocation
– Low Cost Education through Public Sector Institutes
• Post the 18th amendment education has become much of a
provincial subject.
• However the inexperience of provincial bodies in managing
education sector has been a leading cause of financial
mismanagement and discrepancies.
• Federal government intervention is poorly perceived by
provincial governments on nationalistic grounds.

13. Areas of Economic Intervention
• Both federal and provincial governments regulate the
economics of Pakistan’s education sector through:
– Low Cost Education at Public Sector Institutions
– Allocation of National Financial Resources for Educational
Infrastructure Development and Recurring Expenses
• Albeit of its low cost, education at public sector
institutes is deemed to be of low quality.
• Low GDP to education ratio is evident of poor state
commitment towards uplift of education sector in
Pakistan.
Ref. UNESCO et. al. 2007

14. SECTION III
Analysis of Foreign Education Systems

15. Foreign Education Systems
• Analysis of leading foreign education systems are imperative for
developing the targeted framework.
• Globally the educational systems of following countries have
consistently ranked at the top:
– Finland
– South Korea
– Singapore
• All three educational systems are distinguished through their
unique models of state funding and regulation in education sector.
• However all three recognize education as more than just a business
opportunity.
• By dissecting and tailoring these educational systems, an optimal
framework for government intervention can be developed for
Pakistan.

16. Educational System of Finland
• Finland ranks as the second best welfare state in the
world.
• Part of Finnish social welfare goals if to impart free and
uniform education to every national.
• Finland has zero tuition fees and lowest interest rate on
student loans (~1%).
• Government intervention in education sector is centered
on full state funding of all educational institutions and
educational related expenses.
• Teacher training is performed at university level and one
must hold masters degree to qualify for any teaching
post.

17. Finnish Government Intervention
• Central and local governments/authorities are fully
responsible for funding all aspects of provision and
development of education.
• Universities are fully state funded through central
government while lower level institutes receive funding as
below:
– Central govt. provides ~25-70% funding for start-up and ~40-60%
funding to cover operational costs to local authorities.
– Rest is generated by local authorities through indigenous resources
and taxation.
• Non-subsidized private sector institutions are non-existent,
the few private sector institutes receive full state funding.
• Costs of transportation, warm meals, books and teaching aids
etc are borne by the state.

18. Educational System of South Korea
• South Korean education system ranks above Finland and
is touted to be the most competitive in the world.
• Development of education sector has historically been at
the apex of Korean national development.
• Bearing close resemblance to Pakistan, both private and
public sector institutes exist.
• Educational sector is tightly regulated through a central
Ministry of Education, Science and Technology.
• Very little autonomy is exercised by educational
institutions w.r.t. fund generation and teacher
promotions.

19. Korean Government Intervention
• South Korea spends 7.6% of GDP on education which is higher
than OECD average of 5.9%.
• MEST funds both private and public sector institutes based on
following model:
– Public sector schools receive 80% funding; rest is generated through
self-financing.
– Private schools called Hang-wons receive small amount of state
funding; rest is generated through self-financing.
– Hang-wons operate on for-profit basis and generally impart better
quality education.
• This intervention model closely resembles that of Pakistan
however stronger state funding, diligent state regulations and
well crafted curricula make it one of the most revered
education systems.

20. Educational System of Singapore
• Key to Singapore’s educational system is strong focus on:
– Meritocracy
– State Funding of Meritorious and Financially Weak Students
• Singapore has both public and private sector institutions
however state funding of meritorious students and low
income families is guaranteed.
• Although private institutes provide education at higher
price, massive state funding does not hinder academic
growth of poor or brilliant students.
• Singapore has transformed in to an international hub for
higher learning.

21. Government Intervention: Singapore
• Several funding schemes have been implemented by the
state to ensure uniform learning opportunities.
• Following are the key funding schemes:
– No tuition fee for 6 years of compulsory education.
– Financial Assistance Scheme (FAS) to provide financial
assistance for families with per capita income less than SGD$
625.
– Edusave Merit Bursary (EMB) is given to ~40,000 students from
low and medium income families on merit basis.
• By allocating funding on the basis of merit and per capita
income, Singapore has optimized resource allocation.

22. SECTION IV
Alternate Forms of Government Intervention

23. Alternate Forms of Government Intervention
• Based on study of foreign education systems
following alternate forms of government
intervention are presented:
– Case I: Full State Funding of Education
– Case II: State Funding on Merit and Need Basis
• Apart from these forms of economic intervention
public private partnership should be sought.
• The above two state funding models can not be
effective unless a uniform nationwide system and
curricula are established.

24. Case I: Full State Funding of Education
• This model envisages a nation wide mechanism for
full state funding of education.
• Federal government shall fund all aspects of
education through a central body in concert with
provincial subjects.
• Central body shall be modeled on lines of South
Korean MEST.
• Full state funding is possibly solely through allocation
of larger portion of GDP to education.

25. Case II: State Funding on Merit and Need Basis
• Based on Singapore’s funding model of meritocracy
and need basis.
• Financial assistance schemes such as FAS / Edusave
should be implemented for low income families and
brilliant students.
• However model should only adopted once a uniform
andfree primary education system has been
implemented across the country.
• Stringent regulatory measures need to be taken for
effective adoption of any of the two funding model.

26. Public-Private Partnership in Education
• Proposed intervention models can be further refined
by forging stronger public-private partnership.
• UNESCO et. al. 2007 suggests that a framework for
public-private partnership in following areas should
be developed:
– Teacher training and professional development by private
institutions.
– Government to provide tax rebates and other monetary
incentives to be provided to private institutions in
response.

27. THANK YOU
Q & A