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Public goods provision in South Asia
9 June 2008
Lakshmi Iyer
Harvard Business School
Introduction
Basic health and education remain remarkably scarce in developing countries. In 2007, more than one-third of children in developing countries were not enrolled in school and a quarter of children were not immunized. South Asia lagged behind the developing country average with a combined gross enrolment ratio of 60% and an immunization rate of 65% (UNDP 2007, Tables 1 and 6). While these measures varied across the countries of South Asia—primary school enrolment rates varied from 97% in Sri Lanka to 68% in Pakistan—considerable regional differences existed within the countries of South Asia. In India, nearly every village had access to a school in the state of Kerala, while only 39% of villages in Bihar had the same benefit. In Pakistan, 57% of children in Punjab were enrolled in primary schools in 2005, while the figure for Balochistan was only 34%. Rates of full immunization varied from 76% in Punjab to 48% in Balochistan (Government of Pakistan 2007). In Nepal, access to schools is ten times better in the best districts compared to the worst (see Banerjee, Iyer and Somanathan 2008 for a broader range of within-country comparisons of public goods availability). On the other hand, Sri Lanka presented a case of relative equality in educational attainment: the fraction of people completing secondary school varied across districts in from 35% to 41% (Government of Sri Lanka 2006, Table 14.2b).
We should note that simply providing access to a school or enrolling a child in school is not enough to ensure an educated population. The quality of the services provided through these physical facilities is also quite low in many South Asian countries and regions. A nationally representative survey found that 25% of primary school teachers in India and 16% of those in Bangladesh are likely to be absent on any given day. Similarly, 40% of health workers in India and 35% of those in Bangladesh are likely to be absent (Chaudhury and others 2006). In Pakistan, a detailed study of schools in Punjab found that teachers in government schools are absent approximately 4 days a month, and that by the end of Class III, just over 50 percent of children had mastered the Mathematics curriculum for Class I (Andrabi and others 2007). The quality of service provision also varies considerably across regions within countries: teacher absence across Indian states varied from 15% in Maharashtra to 42% in Jharkhand (Kremer and others 2005).
What determines the relative success of some regions in obtaining public goods for their residents, while other areas within the same country lag behind? In the rest of the paper, I review theoretical models of physical public goods provision, as well as the empirical evidence for the channels hypothesized in this literature. Most of these focus on the physical provision of health and education facilities. I consider two classes of explanations: “bottom-up” explanations which focus on the ability of local communities to successfully obtain public goods from the state, and “top-down” factors which focus on unilateral policy interventions undertaken by committed leaders. In this sense, I abstract away from the policymaker-provider relationship discussed in detail in the World Development Report (2004), subsuming the provider-type decision under the second class of factors. The analysis in this paper is purely from a positive point of view i.e. describing which factors matter in practice, rather than an attempt to suggest specific types of public service delivery for specific contexts.
I then consider whether similar factors can explain the variations in the quality of public goods, highlighting some recent field experiments aimed at improving health and education outcomes. In the final section of the paper, I turn to the issue of whether purely private provision of these goods can be the solution to failures of public provision.
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