Report : Higher Education and Economic Development in Africa by Davis
Bloom, Davis Canning and Kevin Chan
For several decades, African countries and the donor institutions they
work with have placed great emphasis on primary and, more recently,
secondary education. But they have neglected tertiary education as an
added means to improve economic growth and mitigate poverty.
This paper challenges the long-held belief in the international
development community that tertiary education has little role in
promoting economic growth. It reviews evidence about the impact that
tertiary education can have on economic growth and poverty reduction,
with a focus on the countries of Sub-Saharan Africa. Enrollment rates
for higher education in Sub-Saharan Africa are by far the lowest in
the world. Currently, the gross enrollment ratio in the region stands
at only 5 per cent.2
Because of a longstanding belief that primary and secondary schooling
are more important than tertiary education for economic development,
the international development community has encouraged African
governments' relative neglect of higher education. For example, from
1985 to 1989, 17 per cent of the World Bank's worldwide
education-sector spending was on higher education. But from 1995 to
1999, the proportion allotted to higher education declined to just 7
per cent. Higher education in Africa has suffered from such reductions
in spending. Many African countries struggle to maintain even low
enrollment levels, and the academic research output in the region is
among the world's lowest.
Recent evidence suggests, however, that higher education can produce
both public and private benefits. The private benefits for individuals
are well established, and include better employment prospects, higher
salaries, and a greater ability to save and invest. These benefits may
result in better health and improved quality of life.
Public channels, though less well studied, also exist. One possible
channel through which higher education can enhance economic
development is through technological catch-up. In a knowledge economy,
tertiary education can help economies gain ground on more
technologically advanced societies, as graduates are likely to be more
aware of and better able to use new technologies.
Our analysis supports the idea that expanding tertiary education may
promote faster technological catch-up and improve a country's ability
to maximize its economic output. Sub-Saharan Africa's
2 Based on authors' calculations derived from data available online
from UNESCO (www.uis.unesco.org). i
current production level is about 23 per cent below its production
possibility frontier. We conclude that, given this shortfall,
increasing the stock of tertiary education by one year could maximize
the rate of technological catch-up at a rate of 0.63 percentage points
a year, or 3.2 percentage points over five years.
This finding challenges the belief that tertiary education has little
role in promoting economic growth. Tertiary education may improve
technological catch-up and, in doing so, maximize Africa's potential
to achieve its greatest possible economic growth given current
constraints. Investing in tertiary education in Africa may accelerate
technological diffusion, which would decrease knowledge gaps and help
reduce poverty in the region.
In recent years, organizations such as the World Bank and major donor
governments have conceded that tertiary schooling may have a positive
impact on economic development. There are signs of progress for higher
education in Sub-Saharan Africa, and some African countries have put
in place innovative policies to strengthen tertiary education systems.
But this progress is limited in comparison with the progress of other
world regions. This may result from insufficient understanding of the
positive effects that higher education can have on economic
development. The findings of this paper suggest that more investment
in higher education may be justified, while more research into the
role of higher education in development is certainly warranted.