Archive of F&D Issues
|Do you subscribe to the hard copy of F&D?
Please fill in this pdf survey
Subscription Application Form
(pdf, 420 Kb)
Use the free Adobe Acrobat Reader to view pdf files
Free Email Notification
Receive emails when we post new
items of interest to you.
Modify your profile
A quarterly magazine of the IMF
42, Number 2
|How Investing in Education Boosts Development
Joel E. Cohen and David E. Bloom
Joel Cohen (Rockefeller and Columbia Universities) and David Bloom
(Harvard University) consider the additional cost of reaching universal
primary education by 2015—estimates range from $6 billion to
$35 billion per year—not only affordable but essential for providing
economic benefits, building strong societies and polities, and improving
health. They also note that achieving universal primary education
is about a lot more than money: many of the chief obstacles lie in
the political, cultural, informational, and organizational domains.
And they want the world to be even more ambitious and aim for high-quality
universal secondary education, possibly by 2015 but certainly by the
middle of the 21st century.
Why Quality Matters in Education
Eric A. Hanushek
There is no doubt that education can give economic growth a powerful
boost, writes Eric Hanushek (Stanford University), but simply spending
more money is seldom the answer. The policy challenges facing most
countries—including developing ones—in the 21st century
have to do with quality rather than quantity. Economic research
has until now focused mostly on the latter, but that needs to change.
Key to finding out what works and what doesn't is measuring student
What Does it Take to Really Help the Poor?
Emanuele Baldacci, Benedict Clements, Qiang Cui,
and Sanjeev Gupta
No one questions that human capital—in the form of better health
and higher levels of educational attainment—is a major building
block for economic growth and poverty reduction. But how do policymakers
get the most development out of scarce public resources? The authors
evaluate the effects of different policies on social indicators and
economic growth. They conclude that spending on health and education
can indeed boost human capital in poor countries and help them reach
the Millennium Development Goals, but only if governments are held
Keeping the Promise
Sub-Saharan Africa has an average primary school completion rate of
just 59 percent, far from the 100 percent required by the Millennium
Development Goal on universal primary education. What can the region
do to enhance its chances of meeting the 2015 deadline? Birger Fredriksen,
the World Bank's former Senior Education Advisor for sub-Saharan Africa,
argues that the region now needs to shift its focus from boosting
admissions to reducing dropout rates and improving learning outcomes.
The Quiet Revolution
Kin Bing Wu, Venita Kaul, and Deepa Sankar
India's elite universities continue to produce the first-rate scientists,
engineers, and managers who helped the country's information technology
sector take off in the 1990s. Far less visible, however, is its more
recent, quiet revolution in primary education, which has vastly expanded
enrollment. India now needs to reduce high teacher and student absenteeism,
lower repetition and dropout rates, and improve student achievement.
Higher education is faced with many problems: universities are underfunded,
student support is inadequate, with the proportion of students from
disadvantaged backgrounds lamentably small in many countries, and
the financing of university education is usually regressive—the
money comes from general taxation but the major beneficiaries are
from better-off backgrounds. The United Kingdom recently instituted
reforms aimed at addressing these problems. Nicholas Barr (London
School of Economics) looks at what works and what doesn't when it
comes to financing tertiary education.
Designing a Global Compact on Education
Gene Sperling and Reka Balu
Gene Sperling and Reka Balu (Council on Foreign Relations) argue that
it is time for the global community to follow through on its promise
to develop a global compact to achieve education for all. At the heart
of this compact must be an obligation for developing countries to
create education plans that will really work, and for developed countries
to support such plans in ways that will maximize incentives for the
expansion of free, quality universal basic education. The authors
call for predictable, long-term financing for recurrent costs, along
with a strengthening of the World Bank's Fast-Track Initiative.
Making Aid Smarter
Dean T. Jamison and Steven Radelet
Dean Jamison (University of California at Los
Angeles) and Steven Radelet (Center for Global Development) assert
that there is potential for substantial progress by 2015 toward achieving
universal primary education. But much will depend on making donor
support more effective. They look at the experience with targeted
funding for health and suggest there is scope for similar performance-based
support for education.
Also in This Issue
Small Fish, Big Pond
Augusto de la Torre and Sergio Schmukler
Many developing countries reformed their securities markets during
the 1990s. As reforms intensified, so did expectations regarding capital
market development. But today, the state of capital markets in developing
countries is mixed. Results have been particularly disappointing in
Latin America: while many of these countries embraced financial globalization
much more vigorously than Asia did, today they lag considerably behind
Asian countries in terms of deepening their domestic capital markets.
What explains this outcome and what lessons can be passed on for future
Brazil's Remarkable Journey
Pablo Fonseca P. dos Santos
Brazil's economy is finally reaping the benefits of reforms undertaken
over the past 10 years. The author, who is from Brazil's Ministry
of Finance, looks at the country's achievements since Lula da Silva's
election as president in 2002, and outlines the reform agenda that
still lies ahead.
Letter from the Editor
Letters to the Editor
Two letters take issue with Raghuram Rajan's thoughts
on why an odious debt regime wouldn't work; and the discussion of
People in Economics
Super Mario and the Temple of Learning
Jeremy Clift seeks out Mario Monti's views on his
legacy as the European Union's Commissioner for Competition, the
debate over a new EU constitution, and what will be the contribution
of the new think tank he now heads.
Report Card on Primary Education
Children everywhere are spending more years in school
than ever before but positive global trends in educational participation
mask large disparities between the world's richest and poorest countries.
Back to Basics
Fiscal Space—What It Is and How to
Fiscal space is a term that has recently become fashionable in the
aid community. Peter Heller explains what it means, and what the
IMF does to help countries find space for worthwhile government
spending in their budgets without jeopardizing the stability of
Bailouts or Bail-Ins?
Responding to Financial Crises in Emerging Economies,
Brad Setser and Nouriel Roubini
The Euro and its Central Bank: Getting United
After the Union, Tommaso Padoa-Schioppa
Turkey's rapid and powerful recovery from a crisis
in 2001 has been bolstered by strong fiscal consolidation and a
rigorous monetary policy. But large government debt and a widening
current account deficit remain sources of vulnerability. The country
will also have to work hard at reducing still-high unemployment.
Debt Relief and Growth
The IMF's Economic Counsellor explains why one-size-fits-all proposals
for debt relief to poor countries may be politically convenient
but don't necessarily make economic sense.