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Education : five drivers of better performance other than money

18 Jul, 2018 News Center 1,215

Mr. Yoonsoo Park, KDI fellow, is delivering a lecture on the topic of ‘Education: five drivers of better performance other than money’.

Money, per se, does not play the greatest role in determining the educational achievements. Many would argue with this statement, however, as investing more money on an existing system of education makes no changes claimed the KDI fellow, Mr. Yoonsoo Park, on 11th of July, 2018, who shed light on five drivers of improvement of achievements in the education system.

Mr. Park referred to the book of Hanushek et al. (Economics of Education, 2011), which turned out to be full of insightful findings and implications. Knowledge or accumulation of years of schooling shaping the human capital has always been the key variables in many empirical studies and models of economic growth. Indeed, education is a crucial catalyst of the long run economic growth. However, as Hanushek & Woessmann (2008) revealed – the quality, not the quantity, is what matters the most in the growth of the real GDP per capita.

What is the five determinant of educational achievement improvement and how do we make use of them?

First, it is reasonable to think of the increased investment in schools, provide more sophisticated facilities, more books, fresh interior. However, the study of OECD counties on educational achievements and changes in the expenditure throughout 1970-1994 (Gundlach et al., 2001) showed that the larger spending does not bear greater performance if the money is directed to the existing system. Money must be utilized in a way to actually eliminate the inefficiency of the existing system.

Second, a curriculum-based external exam is a good incentive in making both teachers and students work, and eliminating moral hazard. Moreover, students are prone to perform better when having the external school-exam. However, Korea abolished this system in 2017 due to the complaints high pressure and fierce competition between schools.

Third, provide more autonomy to schools. On one hand, the administration has more information and can eliminate the risk of information asymmetry. On the other hand, more autonomy may bear moral hazard. The study comparing the public and private schooling reveals that only the private schools do have an accountability for students’ achievements. Important implication: autonomy only works well when incentives are strictly aligned with accountability.

Forth, private schooling is positively related with better performance. However, competition for private schooling may deteriorate the equity in education and further inequality in society. Therefore, the idea of privately operated, but publicly funded schools might be the optimal solutions for the future considerations.

Fifth, tracking the students based on the performance has controversial implications. Poor performing students, if tracked early on, maybe in a disadvantageous situation. Most OECD countries track students at the age of 15-16, while some countries- at the age of 10. The effect of early tracking might be harmful from the equity point of view, while it bears a controversial impact from an efficiency point of view.


Ranat RYSBEK (2017 MPP, Kyrgyzstan)