Political economy of investment in education in South Asia

This paper aims at explaining the patterns of public investment in education and its intrasectoral distribution by its levels in the South Asian countries. First an index of human capital development is constructed which highlights the wide inequalities in educational development between the countries of the region. Public investment in education, which is used as the weight in constructing the index, has been the focus of attention in the remainder of the paper. It has been found that inadequate investment in education is one of the important reasons for failures in realising educational objectives like universalisation of elementary education and eradication of illiteracy. It is also found that it is wrong to say that less investment is made in education by some countries because they are economically poor or less developed. As is shown here, investment in education is not determined by the level of economic development, nor is it determined by the achievements (and correspondingly the tasks ahead) of the educational sector, as reflected by the enrolment ratios and the literacy rates. Further, public investment in any given level of education is also not determined by enrolment ratios in the corresponding levels. It is also shown here that there is a severe misallocation of resources between the different levels of education and an attempt is made to explain the underinvestment and the misallocation of resources in education in the region.