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How IMF&WB Influence 3rd World Education

How IMF&WB Influence 3rd World Education

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Published by Bert M Drona
This paper provides an overview of the roles of the IMF and World Bank from 1980 to the present.

It covers two types of impacts exerted by the IMF and World Bank in the education sector of borrowing countries: the World Bank’s direct involvement in the education sector of developing countries and country-wide economic reforms, or structural adjustment programs (SAPs), financed by the IMF as well as the World Bank.

Even with vigorous education campaigns, there will be disappointing progress unless creditors – especially the IMF and the World Bank – begin to support homegrown, national development strategies and education action plans.

In addition, the institutions need to change their policy prescriptions for ailing economies, in general, and for the education sector, in particular.
This paper provides an overview of the roles of the IMF and World Bank from 1980 to the present.

It covers two types of impacts exerted by the IMF and World Bank in the education sector of borrowing countries: the World Bank’s direct involvement in the education sector of developing countries and country-wide economic reforms, or structural adjustment programs (SAPs), financed by the IMF as well as the World Bank.

Even with vigorous education campaigns, there will be disappointing progress unless creditors – especially the IMF and the World Bank – begin to support homegrown, national development strategies and education action plans.

In addition, the institutions need to change their policy prescriptions for ailing economies, in general, and for the education sector, in particular.

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Categories:Types, Research, History
Published by: Bert M Drona on Oct 04, 2009
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10/20/2011

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Description of the Issue: In the 1990s, Bank-financed projects still emphasize the supply-
side of education – provision of buildings, materials and technology. However, increasingly,
the Bank is conducting demand-side analysis (e.g. beneficiary or social assessment) to
identify problems that impede school attendance of girls, low-income students and other
marginalized or disadvantaged groups.

With the benefit of such analysis, education loans can be designed in ways that increase
school attendance. For instance, in Turkey, a number of measures were taken to induce
girls to attend school, including:

· Construction, extension and rehabilitation of facilities especially those that can induce
attendance of girls (e.g. secure boundary walls, lavatories and female teacher housing).

· Provision of secure transportation to and from schools in areas where school closings
have led to consolidation.

· Introduction of flexible school schedules, childcare policies allowing siblings to accompany
students, and provision of double shifts that make it easier for parents to forego girls’ help
at home.

· Incentives to increase the number of female teachers in rural areas through provision of
scholarships, housing and hardship pay.

The Bank has also undertaken strategies to compensate families for the cost of their
children’s education. Such strategies may involve: stipends (cash payments); community
financing (through monetary or non-monetary contributions); targeted bursaries (cash
payments that go directly to schools, municipalities or provinces); vouchers (usually publicly
financed cash payments); and scholarships.

In 1995, school drop-out rates in Brasilia were dramatically reduced when, Governor Buarque
established an innovative scholarship program. The program provided a stipend (or bolsa)
equivalent to a minimum wage ($128 per month per family regardless of the size of the family
or the number of children in the family) to every low-income family with children aged 7-14.
Eligible families were in the lowest quintile of the income distribution (with an income level
less than $50 per month per family member) and employed or searching for employment. A
school savings program provided a deposit of approximately $90 into a savings account for
each child of a participating family who successfully completed a school year.

Enrollment statistics often mask demand-side problems. During the late 1980s, enrollments
were declining for poor populations in Cote d’Ivoire despite the fact that net enrollments and
education expenditures were increasing. In other words, increases in enrollments of non-
poor children exceeded the decline among enrollments of poor children. The gap in
enrollment and in educational progress widened between the non-poor and the poor,

25

between urban and rural areas and between various socio-economic groups. (Grootaert,
131)

In order to achieve universal primary education, it is essential to boost the DEMAND by poor
families for education by protecting and increasing incomes while, at the same time, boosting
the SUPPLY of education services to disadvantaged regions and groups.

Even after the significant declines in primary enrollments in the 1980s, the Bank is hesitant
about embracing demand-side solutions. A recent Bank publication, School Enrollment
Decline in Sub-Saharan Africa: Beyond the Supply Constraint, notes that between 1981 and
1991, primary enrollment declined in at least 14 of 27 African countries surveyed. It
concludes that declining incomes and employment opportunities MAY impact household
decisions and, therefore, the Bank should not assume inelastic demand for education.29

It is

puzzling that the Bank is so TENTATIVE about this conclusion given the evidence about how
declining income and employment opportunities influence the decisions, including education
decisions, of poor families.

Demand-side solutions might include ensuring that: IMF and World Bank adjustment policies
do not jeopardize livelihoods and diminish incomes; user fees are eliminated; and indirect
costs of schooling are covered by stipends and scholarships.

Until recently, the Bank only considered strategies to offset the indirect costs of schooling.
To that end, it analyzed the effectiveness of funding student subsidy schemes to increase
enrollment among the rural poor in several countries, including: Bangladesh, Brazil, Pakistan
and Tanzania.

Examples: The World Bank has instituted a variety of demand-side financing schemes in:
Bangladesh (stipends for girls); Chad (Community financing); China (targeted bursary for
poor and minority children and free textbooks), Colombia (targeted bursary, voucher system);
Jamaica (student loans); Mexico (targeted bursary for poor and indigenous populations);
Pakistan (subsidies to private schools servicing low-income, rural girl students.

Pros:

· Demand-side financing can reduce or eliminate family costs for schooling and raise
enrollment rates.

· Where targeting of low-income children and/or girls is effective, demand-side financing
can enhance equity.

Cons:

· The costs of applying for a waiver may be prohibitive. In Zimbabwe, families were
required to travel long distances to apply for exemptions to fees. Furthermore, there were
often long time lags (6-9 months) in benefit payments. (Watkins, WIDER, 1997)

29

See Bredie, J.W.B. and Beeharry, G.K., School Enrollment Decline in Sub-Saharan Africa: Beyond the Supply
Constraint, World Bank Discussion Paper #395, 1998.

26

· Financing may only compensate a family for partial costs of schooling. Indirect costs of
schools (e.g. transportation, clothing, foregone income) may be prohibitive.

· Stipends may be misused or siphoned off.

· A social stigma may be attached to children in the populations targeted for assistance.

· Systems may be difficult to administer.

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