Education and the World's Poor -- Entrepreneurship Not Aid is the Solution

Great post by Peter Boettke of "Coordination Problem." Here it is:

"Economists and political economists since the founding of our discipline have been vexed by the question as to why some countries are rich while other countries languish in poverty.  As I like to point out to student audiences, the book that synthesized knowledge and established the discipline was Adam Smith's An Inquiry into the Nature and Causes of the Wealth of Nations, and over the past few years perhaps the top book readership and wide critical discussion wise in the field was Daron Acemoglu and James Robinson's Why Nations Fail, and one of the most respected economists around is Esther Duflo and her approach to studying poverty and policies directed at the alleviation of poverty throughout the world.  In short, we are still grappling with Adam Smith's problems and puzzles that he identified back in 1776.  It is the question that drives us.

Unfortunately, the discussion seems to cycle between an emphasis on the extent of the market, or the capacity of the state; on the accumulation of physical capital, or improvements in human capital; on the good fortune of geographic location, or the path dependency of history --- OR, some interaction between these various factors.  This is all well and good, and the discussion is certainly lively, but progress does appear elusive.  Instead, there appears to be some iron law of intellectucal cycling when it comes to answering the fundamental questions of economic growth and development.

One of the constants is educational opportunities for the individuals (particularly children) in the developing world.  Cut off from educational access, and the prospects for living a life out of poverty are bleak.  But for the vast majority of thinkers this implies greater state intervention and budgeting to provide educational access to its citizens -- particularly the most vulnerable of those.  If the region under investigation lacks the governmental capacity to provide schooling for its young, then a case is made for international aid to support public schools for the poor. This is that conventional presumption.

Pauline Dixon challenges this conventional wisdom in International Aid and Private Schools for the Poor (Elgar, 2013).  Based on extensive field work, Dixon demonstrates how educational entrepreneurs are providing low cost and superior quality educational opportunities to the most vulnerable of populations in the poorest regions of the world, whereas the public school options are failing the children due to misaligned incentives and lack of knowledge that results from being immune from the competitive process. Her work should be widely read by anyone interested in these questions.

The Times Literary Supplement has just released their annual issue with the Best Books for 2013, and Pauline's book have received this honor.  Congratulations to Pauline for this richly deserved honor."