THE UNIVERSITY OF
VICTORIA
NOVEMBER 27, 1998
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THE UNIVERSITY OF
VICTORIA |
A new report from the World Bank does not necessarily point to a major shift in development thinking, says University of Victoria economist Dr. Malcolm Rutherford.
The 1998/99 World Development Report, released earlier this fall, concludes that knowledge&emdash;financial, technical and medical&emdash;is crucial to improving the health and living standards of the poor, and calls for education to be the top priority for developing nations.
"Markets alone are not adequate to ensure economic progress," says the report, which typically sets the agenda for international development. "Societies also require institutions to facilitate the acquisition, adaptation and dissemination of information." More schools, colleges, and universities are needed, it says, to alleviate poverty and increase knowledge about subjects as wide-ranging as accounting, advanced engineering, and birth control.
The report seems to point to a shift away from the World Bank's traditional view that strong markets are the solution to world poverty. But this isn't the case, says Rutherford, chair of UVic's economics department. "The World Bank is not abandoning its belief that markets will lead to development," he says. "It's just re-thinking how this can be achieved."
Simply opening a stock market in a developing nation doesn't work, Rutherford adds. "Foundations have to be laid first, and education is one of these."
The report offers many examples of how enhanced education programs have improved economic growth and people's lives. In the 1960s, South Korea and Ghana had similar per-capita incomes. South Korea now has an advanced post-secondary sector&emdash;and a per-capita income of $10,550 (U.S.). Ghana's per capita income is only $370.
The report adds that research and innovation are important functions of postsecondary institutions. Industrial countries spend an average of five times as much in this area as developing nations.
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