CBER Lecture Series – Dr Asim Khwaja, professor Sumitomo Foundation for Advanced Studies on International Development

CBER Lecture Series – Dr Asim Khwaja, professor Sumitomo Foundation for Advanced Studies on International Development

Dr Asim Khwaja, professor of international development at Harvard Kennedy School addressed a seminar at IBA Karachi on Wednesday 8th August 2018.

The topic of discussion was 'Ingredients for Growth: Enabling Evidence for Transformation in Pakistan'.

Dr Khwaja focused on education as a lens for growth in Pakistan.

He started the discussion with the age-old standard economic model Y = AKα L1-α and elaborated how in recent times labour L, has been replaced by Human capital, H, as a factor for growth. H implying the quality of labour

Y = AKα H1-α

In order to study the importance of education on the demand-side (parents, students), Dr Khwaja and his team conducted six rounds of surveys in rural Punjab, from 2003 to 2018; this was a LEAPS project. Their study confirmed that parents are willing and able to pay for quality learning for their children. As rural parents have the same aspirations as that of urban and urbane parents, that is to provide well for their children, which includes good schooling.

What has been observed is that though elementary and middle school enrolment in Pakistan is growing steadily over the years but proficiency is poor.

So the big question is what produces quality teachers? The answer lies in that all the actors, that is, the parents and their children, the teachers (that form the labour market), the public and private schools and the education intermediaries (those who produce books, stationary, uniform, curriculum developers etc.) all have to come together and work for a unified goal.

Market failures have to be addressed, like why government schools are available at longer distance or why private schools tend to be clustered in a particular area.

In order to succeed in any sector, education or manufacturing or service sector, first and foremost a professional work ethic must be developed. For funding, no school must rely on direct revenues like fees and owner's equity.

In the Randomized Control Trials (RCTs) conducted by Dr Khwaja and his team, unconditional grants given at varying levels, low intensity (only one private school in a particular area got the grant) yielded different outcome versus high intensity (all private schools in the village got the unconditional grant).

It was observed that grant in the low intensity level only improved the furniture of the school but did not translate in to improving teacher quality. On the other hand, high intensity cohort showed a marked improvement in the calibre of teaching staff. This was brought about as all schools got the grant so the schools were competing with each other which meant the school with better teachers would have an edge and be preferred by the parents. Hence, better teachers were hired with a higher pay, existing teachers also got paid a better remuneration and the ineffective teachers were laid off.

Dr Khwaja concluded that empowering the actors and doing diagnostic measurements as opposed to measuring symptomatic outcomes like low GDP, high inflation etc., will show a clear picture to formulate growth policies.