-This article has been originally published by Ashesh Shrestha in Himalayan Times on December 10, 2017.
Human capital is an important factor determining the economic health of a country. There are a group of economists who stress particularly into the fact that the growth of an economy depends upon the situation of its human resource. They believe that long run sustainable growth can only be achieved by investing into the human resource of the country. Additionally, researches have shown that an additional year of education can lead to 20 percent increase in income in poor countries like Nepal. Hence, formation of human capital by investing on education- a crucial factor responsible for development of human capital- is of utmost need.
Government Spending on Education
Supporting this view, the government of Nepal has also been investing a huge sum of money into the education sector. If we look into the growth trend of government spending on education from the fiscal year 2007/08 to 2015/16, we can observe that it has risen by 8.76 % per annum on an average, adjusted for inflation. However, the educational outcomes of the public schools in Nepal has not even been satisfactory. If we look at the educational outcome- measured in terms of pass rate in School Leaving Certificate (SLC) exam, it went down below 30 percent in some of the years in the past decade.
Cost per Child in Public schools
It is unanimously agreed that the government should invest in education and human capital development, but spending without proper outcome will only result into the wastage and loss of resources. Various research have shown that cost of education has been rising in public schools in the underdeveloped countries due to low participation, high repetition, delayed entry, high dropout ratio and low pass rate. A comparative study of cost of education, accounting for outcomes and not accounting for outcomes give us an overview of the loss of resources in public education system in Nepal.
A study of public education in eastern Jhapa shows that cost of educating a child is Rs.16,097. Only considering retained students, the amount rises to Rs. 25,799. Further, if we only account for the students who have managed to pass, the figure becomes Rs. 27,883.
These figures show that in order to make a child to graduate to higher grade, an additional amount of approximately Rs. 12,000 has to be spent than initially intended. This figure depicts that the poor performance of the public schools has increased the cost of public education and has resulted into huge wastage of resources.
Problem with current method of education financing
Nepal has been following conventional method of financing education since the inception of the formal education. The government centrally allocates the funds into various headings and the funds have to be spent by the schools as allocated. The problem with central allocation is that there are high chances of misallocation of these resources. The central government being far away from the schools, might not be aware about the ground realities of the schools and students, their most urgent need and the requirements that can be postponed. Due to the lack of these information, inefficiency in the allocation of funds can easily be predicted. This misallocation can adversely affect the performance of the schools.
In addition to this, in current method of education financing, parents are not involved and hence they are less concerned about the performance of their children. But, when parents are directly involved in financing education of their children they become more concerned about their performance. They also seek accountability and answerability from the schools and teachers. This pressurizes the school to perform better in terms of providing education to the students, which in turn can aid in producing better results.
Now, we can conclude that, it is very important to focus on educational outcomes in order to improve the quality of human resource and also to ensure efficient utilization of public funds. However, the primary question that arises is how do we improve the educational outcomes in the public schools. Before beginning to think about the way by which we can improve the educational outcomes in public school, we must begin with the fact in mind that the conventional education financing mechanism that we have been following for years is not going to work. We should make study of various method of financing education that have been tried and tested in various countries.
Also, the Constitution of Nepal, 2015 provides the power of regulating basic education to the local government. This has provided local government with new opportunity to step in and introduce reform in public education. As the local government are closest to the schools, they are in a better position to have knowledge about the ground realities. Thus, the local governments can come up with new methods of financing education which they think is better suited in their areas in terms of bringing better educational results.