Financial Crises and Social Spending: The impact of the 2008–2009 crisis
& Marijn Verhoeven
, World Economics, December 2010
Financial crises in developing and transition countries have often proven disruptive to policies and programmes due to procyclical trends in government spending growth. Given the importance and significant proportion of public budgets devoted to education and health, cuts in government expenditures during recessions potentially place social programmes at risk. This paper analyses the experiences from 1995–2007 for 131 countries, projects fiscal social spending to 2013, and examines specific issues around fiscal social spending in the current crisis, including donor responses and government and household coping mechanisms.
Growth rate trends in education and health spending fluctuate over time, with greater volatility in education. Despite the variation on growth rate trends, absolute levels of fiscal spending rise steadily over time, with brief flat trends over one or two years, reflecting periods of GDP growth decline. Public spending tends to be more counter-cyclical for education compared to health. While sharp declines in growth rates of fiscal social spending are projected, they are balanced by projected increases in absolute spending over the 2008–2013 period.
Keywords: AIDS, Business cycles, Education, Fiscal policy, Government spending, Health, HIV, Latvia, Recession, Romania, Social security
Education in a Globalized World
David E. Bloom
, World Economics, December 2006
The arguments in favor of education rest on various premises: legal and humanitarian—that children are entitled to an education as a basic human right; economic—that countries will advance faster when people are educated; social and political-that education is essential for building cohesive, equitable, democratic societies; and moral-that devoting resources to education is the “right” thing to do. For decades, countries have worked together in an attempt to ensure that all children get an education, particularly primary education. Falling short, these efforts have been repeatedly renewed. Although enrollment ratios have increased in all developing regions, several regions are likely to fall short of the 2015 goal of universal primary completion. Gender disparities remain high in some regions. Several developing regions are particularly far behind developed ones in secondary and tertiary enrollment, and although enrollment at these levels has been increasing, international efforts have not focused on this. Globalization has offered the biggest rewards to countries that have emphasized education and made improvements at these levels, and it has most benefited individuals who have gained higher-level skills through quality education. In many developing countries, however, the quality of education is low, a fact that has received insufficient attention. Greater investment in education will be needed, but better use of educational funds is also important.
Opening Up Trade in Higher Education: A role for GATS?
J. R. Shackleton
, World Economics, December 2003
Internationalisation of higher education is too often treated as an issue for
universities and national governments alone. The expansion of trade in HE
services is part of a wider picture. The demand for liberalisation of world trade in
all types of services has led to the creation of the General Agreement on Trade in
Services (GATS). This article outlines the GATS processes, notes the scale of
trade in higher education and considers the existence of barriers to its further
expansion. The case for and against greater liberalisation is discussed, concluding
that issues raised by GATS will not go away and are likely increasingly to affect
the domestic HE agenda.