Skewed paradigm
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PAKISTAN identifies itself as an Islamic nation; Iqra is the first word revealed in the Quran. But 24 million children are out of school. The Pakistan Standard of Living Measurement survey shows the literacy rate has slightly declined. In 2015, our average schooling level was 4.1 years, the 29th lowest out of the 188 countries UNDP measures HDI for. Article 25A establishes the right to education. While we cough up money to build metros and motorways, we remain short of cash when it comes to implementing Article 25A.
What should our development paradigm be? Should it focus on soft infrastructure (human capital and institutions ie ‘systems’) or hard infrastructure (metros and motorways)? To answer this, I draw upon the experiences of the UK, US and East Asia. What came first in those cases, soft or hard infrastructure?
Nobel Laureate Douglass North stated that before 1688 Britain had poor institutions. To raise revenue to run the government — and maybe for himself — the king would borrow from the public and refuse to pay back. Crony judges, kangaroo courts and ordinances were the king’s instruments of extraction. This led to the First English Civil War in 1644, followed by the ‘Glorious Revolution’ of 1688.
The revolution resulted in an implicit state-citizen bargain. The wealthy — represented in parliament — began paying taxes and developed a meaningful say in governance. In return the king respected private property rights, accepted checks on his powers and refrained from ruling through ‘favorable ordinances’.
Such institutional changes occurred more than half a century before the Industrial Revolution, which took off around 1760. Clearly, the UK’s institutional development preceded its economic development. Path-breaking innovations such as the steam engine contributed to the Industrial Revolution.
Education in the UK was not neglected for long after industrialisation began. The Factory Act of 1833 mandated two hours of education a day for factory-working children, while 1870’s Forster’s Act set up state-run primary schools.
There’s enough money for metros but not education.
Industrialisation in the US began around 1870 — a focus on education preceded it. By 1820, the ‘Common School Movement’ had taken hold and a broader agreement on state school funding had been reached. During 1825-50 almost every northern state had laws encouraging localities to establish free schools, supported by taxes.
The 83 Federalist Papers reflect the extent to which the institution of debate was utilised while framing the US constitution. In 1804 president Jefferson attempted but failed to impeach Samuel Chase, a Supreme Court associate judge deemed ‘unfavourable’ by Jefferson. Clearly, institutions had taken root much before industrialisation began in 1870.
Thomas Edison invented faster than he could make commercial use of his ideas. Not only was the institution of registering patents well established, so was that of trading patents. Edison applied to patent the electric bulb on Nov 4, 1879; his request was granted after 85 days. In the Third World, even today a patent within 85 days would be difficult.
The four Asian ‘tigers’ — South Korea, Hong Kong, Singapore and Taiwan — took off economically around the 1960s. All achieved 100pc primary school enrolment by 1965. Per pupil spending on primary education shot up by 355pc in real terms from 1965-89. In Pakistan, similar expenditures rose by mere 13pc during the same period.
Institutions and bureaucracies in East Asian economies have received praise. Heavy state intervention in their economies without significant corruption confirms the functionality of their bureaucracies owed largely to quality education.
In all these cases institutions were strengthened before their economies took off. The ‘tigers’ were well educated; the US focused on education much before industrialisation needs emerged; and the UK, the first industrialised country, though lacking in education at the outset had literate innovators. Of course, while one can cite countries that are literate but not developed (eg Sri Lanka), it is difficult to find the opposite.
What is the state of institutions here? Politically, we had the infamous Article 58-2(b), the LFO of 2002, the NRO of 2007, Ayyan Ali, local bodies minus power, Musharraf’s departure, a chief justice’s removal etc. On the politico-economic front we have SROs, mini budgets, China cuttings, tax amnesty schemes, plea bargains and now Panama. Institutional deficit is more than evident.
Pakistan’s vote-winning infrastructure is being developed aggressively while progress on education and institutions remains elusive. The development paradigm is different from that of the countries mentioned here, in the 18th, 19th and 20th centuries. Will we have to change course? Readers may venture to predict, or let the nation find out for itself.
The writer heads the School of Public Policy at the Pakistan Institute of Development Economics.
Twitter: @khawaja_idrees
Published in Dawn, May 8th, 2016
