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Last week I attended a high-level conference in Marrakesh on jobs and growth in the MENA region. What became clear is that, like the mythical Roman god Janus, there are two faces to most of the region’s economies. We can call them the young and the old. And that the choice for MENA governments to make is not which face of Janus to support, but rather how to ensure that both can co-exist and prosper.
One face is the dynamism of the thousands of young entrepreneurs turning their innovative ideas into flourishing start-ups, often with the help of new technologies.
The most visible successes in this genre are companies like e-commerce site Souq.com (bought last year by Amazon) and online transport-booking firm Careem, which are both now worth hundreds of millions of dollars and provide employment opportunities not just for IT professionals but drivers, accountants, marketing experts, lawyers, and blue collar workers alike. While it's noteworthy that Careem now employs 2,000 people and 500,000 drivers, what is more important is that it has empowered women to take up a profession that was hitherto male dominated.
And beyond these household names there are thousands of other new ventures that are spurring innovation and dynamism in the region, sometimes in the most unlikely circumstances. From a service matching job seekers with opportunities in Yemen to the Tunisian company that has designed and produced an amphibious car that it is successfully exporting to Europe and elsewhere, there are many examples of innovation in the region that are a match for any other part of the world.
One particular focus for innovation is Fintech. Around the world, the exponential growth in digital financial innovation is already disrupting how we transact: providing new ways of saving money, taking loans, making payments, sending remittances, and raising capital. In the MENA region where most people still do not have a bank account, the potential for using Fintech is even greater and some exciting new ventures have taken off in this field in recent years. Startups like Verify, which launched in 2017, are using blockchain technology to facilitate transactions and new ventures taking advantage of new technologies are emerging every week. So, one side of economic activity in the region is very positive, with examples of innovation and entrepreneurship and the promise of exponential growth and financial reward.
But the flip-side of Janus—the second face of middle east economies—reveals the large traditional companies which are struggling to compete in an ever more challenging market environment.
These are often companies that depend on the region’s high import barriers for protection from more competitive international rivals, or depend on favorable access to finance from public banks and a preferred position in selling their products to the government. Some of them are public enterprises that have lagged behind in modernizing their plant and equipment, management techniques, and business models, which need not just protection but regular handouts from the public purse to make ends meet.
The very technology driving growth and innovation in one part of MENA economies is seen as a threat by other companies whose business model and employment prospects will be disrupted unless they adapt and change much more quickly than in the past. To be sure, not all large enterprises are a drag on the economy. Some of the best known names are also the most effectively managed—from flag carrier airlines in the Gulf to fertilizer producers in the Maghreb. But still too many of the region’s traditional companies are lagging in a world where the pace of change is accelerating and only the agile will survive.
There is much to be done on both fronts to reconcile these clashing realities into strong, future-facing, diversified economies. And with a quarter of young people in the region out of work, 20 million more joining the labor force in the next five years, and tens of millions of women who want to take their rightful place in the economy, time is running short to take action.
Thus, I propose the following set of steps:
First, fix the business environment.
One of the biggest challenges for any entrepreneur in MENA is dealing with the government bureaucracy. Everything from getting a building permit to a start-up license to paying taxes or dealing with labor regulations can be much more onerous and time consuming than in most other parts of the world. Corruption—petty and grand—can make life even more complicated. In a recent survey, 55 percent of businesses in the region cited corruption as a major constraint. This is higher than the 39 percent in Latin America and the Caribbean or 36 percent in sub-Saharan Africa. Another big concern for MENA businesses is not being able to enforce contracts or to get fair and timely decisions from the courts when they have a commercial dispute. In today’s world when capital is mobile, it is more important than ever for countries to make a concerted effort to attract international firms, and retain the resources and talents of national investors. MENA’s countries must step up their efforts.
Second, scale back and re-think the role of the public sector.
As economies become more complex, the state needs to update its role as a regulator. Too many regulations in MENA countries were designed for the state dominated economies of the last century. They need simplifying and modernizing. At the same time, the public sector needs to shed much of its role as a producer. Why are government-owned factories in the region still producing cement or running hotels, businesses that are neither strategic nor natural monopolies? And the public sector can no longer be the employer of last resort—a model that has resulted in bloated bureaucracies, made it harder for private businesses to recruit competitively, and led to a public-sector wage bill that is no longer sustainable given the fiscal constraints that most countries now face. The technology revolution can also be used by governments to simplify how they work and how they interact with their citizens.
Third, focus on the special needs of both the new and traditional economies.
Digital economy startups in some MENA countries are hampered by the high cost of internet access—not just for themselves but for their potential clients. Access to finance is harder for firms who work with ideas and algorithms instead of factories and equipment that were part of traditional businesses. Fintech firms generally need a regulatory environment that is more flexible for their startup phase than is the case for established firms in the financial service industry. However, only a handful of MENA countries have specialized Fintech regulations in place today. A key to developing a supportive environment for digital economy firms is for governments to engage with them in a regular dialogue—to understand better what drives them and what is holding them back. This will require developing new channels of communication since the traditional private sector interlocutors for governments are generally representative of the established and older firms.
At the same time, there is a need to modernize the "old" economy. While the digital economy will generate many new successes and attract substantial media attention, the bulk of private sector activity and jobs in the MENA region will continue to come from the kinds of businesses that have been around for a generation. Helping these businesses to grow, modernize, and adapt to a more competitive global marketplace remains a key priority for growth and prosperity. This is where actions to improve the business environment will be most impactful. This is also where gradually opening MENA economies to international trade and investment will help to bring the technology, management skills, and market access that will raise value added and product quality. Finally, this is where a mindset change is necessary to move to promoting private business rather than protecting well connected private businesses.
Finally, strengthen links between the education system and the job market.
Education systems worldwide are struggling to adapt to the new skills that will be needed by tomorrow’s workers. In MENA, too many graduates don’t even have the right skills for today’s private sector jobs. There are some good examples of vocational and job related training in countries across the region but these need to be scaled up and mainstreamed. A special challenge is to ensure that the 28 million children in the MENA region in need of humanitarian assistance due to continuing violence, displacement, natural disasters, and economic inequality do not end up as a lost generation robbed of their education and of their prospects. And it is important that women and girls receive the same education and training so they too have the right skills for private sector jobs. Increasing women’s participation in the job market is not just important for them but could generate a trillion dollars of economic growth over the next decade.
In order to implement these four changes, the MENA governments must have a more proactive approach to learning from the successes of their peers. Within the region there are good examples in every area. The United Arab Emirates, Jordan, and Egypt have made fast progress in enabling Fintech startups. Morocco has been able to strategically target and catalyze the establishment of new industries (automobiles and aeronautic parts) which today generate more export revenues than its traditional sectors. Qatar and the UAE have made rapid progress in improving their business environment. Iran and Jordan have valuable experience to share in phasing out generalized and wasteful energy subsidies and replacing them with targeted cash transfers to needy households. Drawing upon the repository of knowledge in regional and international organizations can be an added source.
The task ahead is to learn from each other’s experiences and to adapt them to each country’s own circumstances. This is not glamorous work but it’s what’s needed to move forward. The priority, as Christine Lagarde concluded at the conference, is to act now.
The Sustainable Development Goals are an ambitious set of targets for global development progress by 2030 that were agreed by the United Nations in 2015. A review of the literature on meeting "zero targets" suggests very high costs compared to available resources, but also that in many cases there remains a considerable gap between financing known technical solutions and achieving the outcomes called for in the SDGs. In some cases, we (even) lack the technical solutions required to achieve the zero targets, suggesting the need for research and development of new approaches.
A lot has been said and written about post-conflict Liberia’s broken civil service and capacity void, but—at the risk of sounding self-pitying—I believe that no ministry felt the impact as severely as the Ministry of Finance at the dawn of President Ellen Johnson Sirleaf’s first administration in January 2006.
There we were with the imperative of rapidly obtaining debt relief and quickly delivering tangible improvements in our country’s finances and living conditions—with little capacity and debilitating corruption. I had returned to lead a ministry with many ghost workers—people on the payroll in name but not in body—and post-retirement-age employees. A number of senior staff had, at best, a substandard high school education. Some otherwise capable people were appointees of Charles Taylor and the transitional governments whose capacity had previously been directed towards creative means of defrauding the state!
In need of quick fixes across the government, I think it’s fair to say that both our administration and our international partners were slow to fully embrace civil service reform and institution-building. The wealth of technical assistance under the Governance and Economic Management Assistance Program (GEMAP) and other programs certainly helped us move our reform efforts forward, but it built little sustained capacity. Progress was made in payroll clean-up and limited organizational restructurings here and there, but we were simply too focused on getting things done in those early years to tackle the difficult business of comprehensive civil service reform and institution-building.
At the Ministry of Finance, we repeatedly stated that these were critical long-term objectives, but we were inevitably constantly consumed with putting out fires. So to create some desperately needed fiscal space, we worked to remove ghosts and staff beyond retirement age from the payroll. As head of the first ministry to wrestle with the latter problem, I was smeared as the “heartless” minister who targeted aged staff who were terrified of facing irregular, measly pensions. To fill critical capacity holes, we pounced on the various donor and philanthropy-financed initiatives, including Transfer of Knowledge Through Expatriate Nationals (TOKTEN); expatriate advisors under GEMAP; an outstanding Mozambican advisor to the minister financed by the World Bank; the Senior Executive Service program; and the Scott Family Liberia Fellows Program and Harvard’s Kennedy School MPAID summer interns, both of which provided extremely bright and energetic young expatriate staff.
These last two programs would eventually inspire the development of the President’s Young Professionals Program, or PYPP, which continues to help strengthen Liberia’s civil service today. Through a transparent and meritocratic process, the PYPP recruits, trains, and places top university graduates throughout the government. Since its establishment in 2009, more than 120 fellows have been recruited into the Liberian civil service through the PYPP, including 19 in the Ministry of Finance and 7 in the Liberia Revenue Authority. More than 90 percent of these fellows remain in government today and the majority of those still serving have risen to positions of greater responsibility.
As Liberia begins its transition to a post-Sirleaf government, the PYPP will no doubt come to be appreciated as one of her noteworthy achievements. The incoming minister of finance will certainly find herself or himself with more capacity at the junior and middle ranks of the ministry than I did in 2006. I have high hopes that this inheritance will convince the new administration to fully own and safeguard the PYPP as an important component of an institution-building strategy for Liberia. As the PYPP model begins to expand to Ghana and Cote d’Ivoire under the banner of the Emerging Public Leaders (EPL) program, I expect that in time other ministers of finance will consider how this promising program can help address their particular capacity development needs.
Yet I can’t resist this opportunity to spell out the four reasons why PYPP and EPL-type programs could be especially suited to the evolving capacity needs of ministries of finance in constrained resource environments: attracting young talent; adaptability to digitalized public finance; cost-effectiveness; and building integrity.
With few graduate-level applicants and stiff competition for young talent from commercial banks and other private sector establishments, deliberate efforts to attract the brightest graduates from local universities into ministries of finance are necessary (assuming hiring into the civil service is not frozen). Career-building incentives in the form of opportunities for professional growth, mentorship, and performance management can be valued as attractive supplements to otherwise moderate financial compensation and increase retention.
The ongoing digitalization of public finance underscores the need for skilled staff that adapt comfortably and productively to a more technology-dependent revenue administration and public financial management system. Such staff are more likely to be young people, many of whom are “digital natives” more conversant with technology than current older civil servants.
PYPP and EPL-type programs can render young fellows highly cost-effective when compared to internationally recruited (junior) technical consultants. At an annual cost of $15,000 per fellow in Liberia, these programs can be more cost-effective than other models of technical support and capacity-building.
Last but not least, the meritocratic recruitment process and focus on integrity in PYPP and EPL training can help develop a cohort of young civil servants that contribute to the fight against corruption and increase the credibility of ministries of finance in that connection.
Civil service reform and institution-building will forever remain fraught with political pitfalls and resistance. So when low-cost innovations can help move them a few steps forward, ministers of finance in resource-constrained environments should eagerly embrace them.
 GEMAP was international partners’ response to the record of corruption and bad governance of the transitional government prior to President Sirleaf’s election. It placed financial controllers in key state-owned enterprises, a financial expert in the Central Bank of Liberia, financial experts in the cash management committee at the Ministry of Finance, and a budget adviser at the then-autonomous Bureau of the Budget. With a focus on controls and the co-signing authority given to these experts, GEMAP was very controversial but ultimately helpful (“a necessary intrusion” in the words of the president).
 See Gupta, Keen, Shah, and Verdier Digital Revolutions in Public Finance, International Monetary Fund, 2017.
I was recently invited to participate in a panel discussion, titled “Artificial Intelligence and the Future of Human Labor” at the 10th edition of World Policy Conference. Preparing for this panel provided me with an opportunity to think more deeply about the ways in which artificial intelligence (AI) and automation will impact the future of work. And I came to five main conclusions.
Change is coming ready or not
Technological progress and the advancement of AI and automation will have a major impact on the nature of work in the coming decade. We are all familiar with the transport revolution where self-driving cars are now a question of “when” not “whether.” But we need to recognize that AI, robotics, 3D printing, and big data will change the nature of many different types of jobs in ways that we can already anticipate and in ways that we cannot even imagine today. And coping with this kind of widespread and rapid change—notwithstanding the gains it will bring—will raise difficult societal challenges that few countries are prepared to address.
The optimists, on the other hand, maintain that while many occupations could in theory be impacted, the actual pace of introducing new technologies into the work place will be more gradual, that in some cases robotic technology might turn out to be more expensive than traditional production methods. Thus, low paid garment workers in Bangladesh or Cambodia may simply be pressured to keep working at low wages if they want to avoid losing their jobs to robots. They also point out that it is “activities” that can be automated not “occupations.” This is certainly true but it still means that many occupations will be transformed because the activities that comprise them will be eliminated or radically changed. Finally, they point out that historically societies have been able to adapt to—and gain from—various waves of technological change and this time will prove no different. Unquestionably, the quality of life today for the vast majority of human beings is better than for our predecessors of a hundred years ago because of technology. And all along, there were people whose worries about the disruptive impact of technology proved exaggerated.
I believe that—as (almost) always—the likely outcome will be somewhere in between but the more important point is that even a slower pace of introduction of new technologies will still far outstrip the capacity of many societies to absorb the change. No one is seriously arguing that the pace of digital technological innovation over the coming twenty years will be slower than in the past two decades and it is now widely accepted that the way in which we have managed the political and social consequences of technological change in this recent past has been far from satisfactory. Therefore, it is important not to argue about the potential magnitude of the impact and instead to anticipate possible challenges that technology will create for human workers and ways in which the development community can help mitigate negative outcomes.
And not just in advanced economies
Discussions surrounding AI, automation, and the future of work tend to focus on the ways in which technological progress is affecting advanced economies. It is important to recognize, however, that the impact of new technology will be equally important for workers in developing countries. For example, Adidas employs about a million people, mostly in factories in Asia and Africa, to make about 300 million pairs of shoes every year. Last year they opened a “speed-factory” in Germany, that aims to make 500,000 pairs of shoes a year, with only 160 production jobs for human workers. The remaining jobs within the factory are automated and done by machines. Another example: FoxConn (the firm that produces Apple and Samsung products in China’s Jiangsu province) recently replaced 60,000 Chinese factory workers with industrial robots. In China as a whole, factories are projected to have more than 400,000 industrial robots installed by 2018, the highest number of any country in the world. And the jobs that will be impacted range far beyond manufacturing—many activities in agriculture, in services, and in government could be radically changed through the application of new technologies.
Policy discussions about the ways in which governments can be prepared for the radical changes in human labor that are coming must, therefore, include ways to limit negative impacts in developing countries. This includes rethinking the basic model of development pathways whereby surplus labor shed from agriculture is absorbed in simple manufacturing which raises both living standards and productivity. Technological progress that displaces workers could diminish the cost competitiveness of emerging economies that has, until now, driven their growth especially if these economies do not use new technologies to increase productivity. As manufacturing becomes increasingly automated, emerging economies will need to find strategies to decrease their dependence on manufacturing exports to boost growth. These strategies will obviously vary by country due to differences in resources, policies, and infrastructure capabilities.
New technology requires new skills
Historically we have seen that after a technological revolution, new and better jobs are created after the initial displacement of workers but that these workers need new skills to adapt to these new jobs. The need for new skills is even more critical today because of the pace and breadth of technological change. However, while many agree that our current education system is not teaching our children the skills they will need, we are not as confident about what precise skills tomorrow’s workers will need or how best to ensure that they acquire them. Continual skills training and life-long learning could help workers gain necessary skills to keep up with the changes in activities required within a job due to automation and AI. Education efforts could also help some workers shift from easily automatable jobs into less automatable jobs such as those in healthcare or childcare. However, the vast majority of workers in developing countries have no more than a high school education and it is not evident that they could be easily retrained for the skill set needed for the new economy. Nor is it clear how governments would pay for this retraining or incentivize companies to bear the costs of retraining.
Beyond jobs to relationships
AI and disruptive technologies will impact not just the nature of work but also the relationship that workers have with their employers, with colleagues, and with the state. Legal systems are already grappling with the question of whether an Uber driver is a “worker” in the traditional sense. A larger question is how to provide security of work and income to the potentially large share of the workforce that will work in the gig economy. One idea is to adopt a universal basic income (UBI) to insulate workers, whose jobs were replaced or changed by disruptive technologies, from poverty. Additionally, a UBI could enhance the ability and security for workers looking for better jobs or entrepreneurial opportunities. And a universal basic income could spur innovation and encourage people to take entrepreneurial risks because of the safety it provides. However, there are basic issues of affordability and regressiveness that need to be addressed before this idea can be applied on any large scale. There are also issues of how healthcare, pensions, and professional skills development will need to be modified in a world with many more individual contractors. This is of course more complicated in developing countries where financial resources are limited and institutional capacity is underdeveloped.
Don’t underestimate the politics
Finally, we need to recognize that this new era of technological revolution will be political as much as economic. With the rise of automation there will be winners and losers and redistribution will be necessary to compensate the losers and a failure to do so can have enormous political consequences. In the United States and Europe, a failure to adequately compensate the losers of globalization and technological change has helped lead to a rise of populism which is changing the political landscape.
Change is here. While we may not know how large this change will be or what the effects this technological revolution will have on human labor in five, ten, or twenty years, it is highly likely that the scope and magnitude of change will require considerable societal adaptation and that this process will need extensive preparation and discussion. We need to start thinking now about different development approaches that can help mitigate the negative impacts of the technological revolution in both advanced and developing countries.
Much has been written about the difference in education outcomes between public and public-private partnership (PPP) schools. According to a review by Ark, so far there is insufficient or modest evidence linking PPPs—including contract schools, subsidies, and vouchers—with better learning outcomes (as distinct from evidence about public versus private [non-PPP] schools).
A new CGD study looks at the impact of outsourcing the management of some government schools to private operators in Liberia. The study yields a mixed bag of results. On the plus side, one year of outsourcing management to private operators raised learning by 0.6 extra years of schooling compared to other public schools, a pretty substantial impact. But there are caveats: costs were higher, PPP schools were better-staffed, there was heterogeneity in performance among operators, and the largest contractor was allowed to transfer excess pupils and underperforming teachers to other government schools.
Could alternative school arrangements, such as contract schools, potentially improve learning outcomes? One key mechanism by which contract schools could deliver better learning outcomes is through different management structures that may offer greater autonomy in school- and teacher-level decision-making. A vast literature links better management practices, in particular a greater degree of autonomy, with better performance (Dobbie & Fryer, 2013; Angrist et al., 2013). However, most of these studies are focused in developed country contexts with well-functioning accountability mechanisms. In fact, cross-country studies suggest that increases in school autonomy lead to better performance in high-income countries but worse performance in low- and middle-income countries (Hanushek et al., 2013; Contreras, 2015).
A recent RISE working paper by Lee Crawfurd looks at two main questions in the Ugandan context: First, does school management affect student test scores? Second, is there a difference in management quality between public, private, and PPP schools that could be linked to those different test score results?
Figure 1. Management Scores by School Type in Uganda
Source: Own visualization based on data from Crawfurd, L. (2017)
The results show that school management quality (as measured using an adapted version of World Management Survey) matters for student value-added. A one standard deviation improvement in management quality is associated with a 0.06 standard deviation improvement in test scores.
But while management is related to performance across schools, the study found no difference in school management quality in government, private, and PPP schools, despite the higher level of autonomy potentially available to PPP schools. In fact, public and PPP schools tend to have the same average management scores. Private schools only trail slightly behind. An international PPP performs the best, followed by elite government schools. Therefore, the paper leaves the role of management in producing the private school premium largely unexplained. This supports previous research, like that in Chile (Vegas, 2002), showing that while characteristics of the school like the autonomy of teachers in the classroom matters, these characteristics are not strongly associated with broad school type. More recent research by Barrera-Osorio et al. (2016) looking at subsidy-based PPP schools in Uganda also finds that participation in the program does not change private school governance in a systematic way.
Among non-elite schools there is little correlation between school fees or other school resources and management performance—implying that better management practices could be a low-cost strategy for improving learning outcomes. Yet most non-elite schools do not adopt better management practices. It is possible that most school leaders are not aware of good modern management practices or how to implement them.
The study from Uganda shows that management quality does matter for learning outcomes, but public and public-private partnership schools do not differ on a commonly used measure of school management. A key aim of the RISE programme is to look beyond the results of specific inputs and interventions and to take holistic views of systems—and “management” is itself one of the key accountability relationships driving outcomes in education systems.
Lee Crawfurd’s complete RISE working paper School Management and Public-Private Partnerships in Uganda is available here.
This is one of a series of blog posts from “RISE"—the large-scale education systems research programme supported by the UK’s Department for International Development (DFID) and Australia’s Department of Foreign Affairs and Trade (DFAT). Experts from the Center for Global Development lead RISE’s research team.
“There are better ways to improve test scores,” “food is expensive,” “most kids would eat anyway,” and other counterarguments contain some truth, but fail to overturn the basic economic logic of free, universal school feeding in poor countries.
Back in February I visited Tassah Public School in rural Bong county, Liberia. It had several nice classroom buildings arrayed in a big open field, and the teachers were all there to meet us. But there weren't very many kids, which was apparently normal. I sat in on a fifth grade English class with just two students. Enrollment had fallen from 360 students down to just 175 this year, and nobody could tell us why. The principal said some children had to walk three hours through the bush to get there. Being sort of a jerk, I persisted. “Wasn't that true last year as well? The school didn't move, did it?” I got the blank stares I deserved.
Finally, one of my colleagues asked the right question: “Do you have a school feeding program?”
“We used to,” the principal said. (I'm paraphrasing a bit here; my field notes are rough.) But the NGO that ran the program had closed it this year. And when the food left, the kids left. “By midday they're hungry and lose interest” he told us, “and now that there's no food, some just don't come.”
The world is full of hungry kids, not learning anything in school
Earlier this year the UN's Food and Agriculture Organization announced that hunger is rising globally for the first time this century. Admittedly, those numbers are shaky, and the uptick is driven somewhat by acute crises in places like Yemen and South Sudan. But there are broader signs that the world is not on an easy march to eradicating hunger. For instance, the data on child malnutrition rates are based on household surveys rather than macro models of the food supply, so they are somewhat more reliable than hunger numbers. They reveal a long-term global decline in malnutrition rates, but also a rising absolute number of malnourished children in sub-Saharan Africa over several years—which represents more than just a blip or a bad harvest.
At the same time, the World Bank's new 2018 World Development Report focuses on the “learning crisis“ in the developing world. Teachers are underprepared and often absent, basic materials are missing, and schools are poorly managed. As a result, children in many countries go to school for years and emerge functionally illiterate.
One shouldn't draw too strong a link here. These twin crises of growing hunger and low learning have distinct causes, even where they overlap geographically. But a problem's solution doesn't need to be a mirror image of its cause, and school feeding may help make progress on both fronts.
As with any public policy, the case for school feeding rests on its effectiveness, affordability, and—a dimension that is particularly acute in fragile states—its feasibility.
Aren't there better ways to improve learning outcomes?
If you survey the research on how to improve learning outcomes in developing countries, you'll find the reviews disagree on what works best, but few put much emphasis on food.
As Dave Evans and Anna Popova at the World Bank note in that link, some reviews declare pedagogical interventions the clear (albeit vaguely defined) winner, while others highlight computers and technology. JPAL, an organization that specializes in RCTs in poor countries, has put a big emphasis on hiring contract teachers to run remedial lessons targeted at students' ability level.
Evidence on the effectiveness of school feeding is more promising than this summary might suggest though.
First, food keeps kids in school. As Harold Alderman and Don Bundy note in the World Bank Research Observer (2011), “numerous studies show that in-school feeding has a positive impact on school enrollment or participation in areas where initial indicators of school participation are low.” The graph below shows results from all the available studies we could find (drawn mostly from earlier reviews here, here , here, here, here, and here).
Second, food facilitates learning. Quoting Alderman and Bundy again, “Improved performance as measured by tests of achievement is often reported for [school feeding programs], although there is a fair amount of variance as to which ages and which skills are most affected.”
Beyond its effectiveness, a potential selling point of school feeding is its feasibility. Abysmal learning levels and chronically absent teachers highlight that many poor countries simply can't deliver basic education to the bulk of their populations. But experiences from India to Mozambique suggest that even weak states—sometimes with the help of aid donors—can successfully deliver meals to millions of kids. Writing about India's massive school feeding program, Abhijeet Singh notes:
All of this suggests that governments might do more good for more kids if they reallocated money away from some current activities that rank high on the global development agenda in education—including purchasing laptops and even (gasp) raising teacher salaries—in order to feed kids.
Won't a universal school lunch program end up feeding a lot of kids who would eat anyway? Sounds inefficient and wasteful.
A shockingly high share of kids actually won't eat anyway. Back in 2004, Farzana Afridi measured children's nutrition intake over the previous 24 hours in Madhya Pradesh communities served by India's national school meals program, and randomly assigned children to be interviewed so that the recall period would or would not fall on a school day. She found that on average children's nutrient consumption went up on school days by the equivalent of 50 percent to 100 percent of the nutrients in school meals—with no such difference for children in schools where the program wasn't operating. Free food was additional food.
It's not just in India that school meals seem to provide nutrition that kids wouldn't get anyway. In both Kenya and Jamaica (see references in chart), school feeding led to significant weight gain for children and some evidence of increased height. Research in China focused not on school meals per se, but found that randomly assigning nutrition supplements to school children raised hemoglobin levels (confirming a nutritional deficit was present that wouldn’t be met otherwise) and contributed to significant learning gains. (Notably, other research in China shows that nutrition supplements outperformed the government’s policy of one egg per child in school.)
But even if some “undeserving” kids will get free lunch in a universal program, there are good reasons to make any such program universal.
Targeting or “means testing” opens a dangerous can of worms. The state in low-income countries often lacks the capacity to target social programs effectively. In proposing a universal basic income, the Indian Ministry of Finance noted that many current anti-poverty programs are so mis-targeted that they cease to be progressive at all. When the central government lacks the information to target objectively, a common response is to devolve that job to local officials. But giving local politicians the discretion to pick beneficiaries opens them up to corruption and clientelism.
Universality may also be good politics. Political support for anti-poverty and social protection programs often hinges on the participation of the middle class, and simple models of rational voters suggest proposals of targeted anti-poverty programs may lead to lower transfers to the poor than universal proposals.
Is universal school feeding really affordable?
According to the World Food Program, school feeding costs an average of about $56 a year per child in poor countries, rising to about $370 in upper-middle and high-income countries. Poor countries only spend about $82 a year on basic education, so adding meals would be a non-trivial increase in percentage terms in some contexts. Note, however, that some of the biggest programs, like India's, cost just a fraction of this, at about 3 cents per child per day.
Financing universal school meals is a serious obstacle. But it's worth noting that the sticker price may seriously exaggerate the true social cost of these programs. Consider two extreme scenarios.
If households would fill in the gap and kids would eat just as much without school meals, then the social cost of school feeding is only the extra expense of public provision, over and above what households would have spent otherwise. At a dollar a week to feed kids lunch, it's not at all clear that public provision of food costs more than private provision. No study I've seen to date can reliably answer this question, but it seems school feeding could very well be cost saving. The WFP notes that even in the most expensive large school feeding programs, the cost of administration and delivery is about 20 percent of the total, and government food subsidies lower the price of food for non-beneficiaries.
Alternatively, consider the other extreme scenario in which all school feeding is additional, which is closer to what Afridi found in India. In this case the social cost of school feeding is higher—we're spending money that wouldn't have been spent otherwise. So be it. To most audiences, the moral and policy case for school feeding is stronger, not weaker, in this scenario, if the counterfactual is that children go hungry.
State capacity and basic needs trump Econ 101
When I took Econ 101 in Lincoln, Nebraska, we learned that education has positive externalities that justify government intervention, while food staples are commodities that can be efficiently traded on private markets. Lincoln is a town full of high-quality Midwestern public schools, surrounded by private commercial farms producing more corn than America knows what to do with. The world around me looked like my textbook.
Rural Liberia does not look like my Econ 101 textbook. State capacity to deliver basic services and households' urgent need for food are much more important considerations than addressing externalities. Even if food markets functioned perfectly, many households simply lack the means to buy or grow enough food to feed their children. The cash-strapped government does little to help them. Public efforts to provide basic schooling have mostly failed. As of 2015, net primary enrollment was 37 percent and three-quarters of adult Liberian women who had gone to six years of primary school were still illiterate. Meanwhile, 32 percent of their kids are stunted, a sign of severe malnutrition.
Fixing Liberia's schools is an intellectual and political juggernaut. Feeding kids isn't.
Afridi, F. (2010). Child welfare programs and child nutrition: Evidence from a mandated school meal program in India. Syracuse University.
Du, X., Zhu, K., Trube, A., & Hu, X. (2006). Effects of school-milk intervention on growth and bone mineral accretion in Chinese girls aged 10-12 years: accounting for cluster randomisation. British Journal Of Nutrition, 1038-9.
3.5 million children around the world are refugees, many with little or no access to schooling. That means we won’t come anywhere near our targets for the fourth Sustainable Development Goal—quality education for all—unless we can address the refugee crisis. Save the Children International president Helle Thorning-Schmidt joins the CGD podcast to discuss how donor countries can help.