Transcript Education and Development in East Asia

Globalisation, Education and
Development:
The Case of East Asia
National University of Tainan
18.5.07
Andy Green
Institute of Education
University of London
Research Project
‘Globalisation, Education and Development’
Funded by DFID
(Department for International Development)
Published by DFID in May 2007:
Green, A., Little, A., Kamat, S., Oketch, M. and Vickers, E.
Education and Development in a Global Era: Strategies for
‘Successful Globalisation’
Scope of IOE Project
A Review and Synthesis of the Literature on Globalisation,
Education and Development with respect to:
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Education, Globalisation and Economic Development
Globalisation, Skills, Qualifications and Livelihoods
Education and Social Cohesion
Based on:
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General International Literature
Literature Specific to China, Kenya, India and Sri Lanka
Aims of Research
To assess the role of education in promoting
‘successful’ engagement with the Global
Economy.
By ‘successful’ we mean ways of engaging with
globalization which lead to economic growth with:
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Reduction in Poverty
Increasing income equality
Social Improvements (including greater social
cohesion)
Growth with Equity
The Importance of Globalisation
Globalisation
– understood as the rapid acceleration
of cross-border movements of good,
labour capital services, information
and ideas –
Changes the terms of development
Theories of globalisation and
development
There are many theories of globalisation:
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Hyper-globalisation theory (Ohmae et al)
Sceptics (Hirst and Thompson)
Transformationalists (Held)
How you view globalisation will determine how
you view the possibilities for development.
Different emphases 1:
Convergence or divergence?
1.
2.
If you view globalisation as an inevitable,
linear, convergent and uncontradictory
process of dissemination of free market
capitalism then there is only one road for
development (Washington consensus
model).
2. If you view it as contradictory and
uneven then alternative modes of
development are conceiveable.
Different emphases 2: Role of the
state
1. If you see the role of the national state
under globalisation as increasingly
marginalised then the state has a limited
role in development – best to leave the
markets to work without state intervention
and just give aid (Sachs)
2. If on the other hand you regard states as
important to development (‘failed states’
as hindering/’developmental states as
promoting) then you are likely to judge
the role of the state as highly important.
The Contradictions of Globalisation
Globalisation is an uneven, contingent and
contradictory process, creating greater
global wealth but also increasing global
inequality in the distribution of wealth.
Some Regions (Europe, North America,
and East Asia) have clearly benefited
more from global engagement than others
(such as Latin America and SSA)
‘Successful gobalisation’
Because globalisation is contradictory and uneven
and state-dependent there are different possible
responses to it.
‘Success’ in engaging with the global market
depends on the :
Terms of engagement which each country can
achieve.
Some countries are able to negotiate better
terms than others
Globalisation and Development
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Changes the nature of world markets
and what it takes to be competitive
in them
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Changes the nature of the national
state and the relations between
states and other levels of governance
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Alters the possible paths of
development
Globalisation is changing the
dynamics of development
In terms of the factors promoting economic
development globalisation increases the
importance of :
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international trade (and thus the need for exportoriented economies)
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Knowledge, skills and technology transfer for
development in the global ‘knowledge economy.’
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MNCs and FDI in knowledge and technology
transfer
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education and skills (as argued in endogenous
growth theory)
The Conditions for ‘Late
Development’ (Amsden)
‘Late industrialising countries’ countries can
develop more rapidly in a global era due to:
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the global disaggregation of production and
services industries – the global division of labour
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Increased possibilities for knowledge and
technology transfer from:
- increased investment flows
- increasing codification of knowledge and skills
- advances in ICT
The Role of Education
Education can play major role in promoting
successful engagement with the global economy
by six key processes:
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Providing skills which attract inward investment
Assisting in knowledge and technology transfer
Upgrading the economy
Reducing inequality
Promoting social cohesion
Strengthening state capacity
The East AsianCase(s)
East Asian economies have proved to
be exceptional in negotiating
favourable terms of engagement
with the global economy.
Partly because of the role education
has played in promoting the six key
processes.
East Asian Development
1960 -1990: The East Asian Miracle
East Asian economic growth between 1960 and
1990 was the fastest on record for any region
It took Britain 58 years to double real pc income
after 1780
USA: 47 years from 1839
Japan 34 years from 1900
Korea: 11 years from 1966
In 1960 S. Korea’s GDP equalled Sudan’s and
Taiwan’s Zaire. (Morris, 1995). These are now
East Asian Growth 1965 - 1990
23 economies in East Asia grew faster than all other
regions at 5.3% pa, mostly due to rapid growth of 8 high
performing Asian economies (HPAEs) : Japan, the four
tigers (S. Korea, Taiwan, Singapore and Hong Kong) and
the East Asian NICS: Indonesia, Malaysia and Thailand.
Average % growth pa:
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HPAEs:
East Asia minus HPAEs:
OECD:
Latin America:
Sub-Saharan Africa:
(World Bank : East Asian Miracle, 1996))
5.3
2.3
2.3
1.9
0.1
Growth rate of Japan and tigers during 25 years from 1960
was over 8% pa on average (Wade, 1990). Growth rate of
S. Korea 1962-1979 averaged 18.4% (Amsden, 1992)
Growth, Distribution and Well Being
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Between 1960 and 1998 real income pc in Japan and tigers
increased x 4
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Life Expectancy in HPAEs grew from 56 years in 1960 to 71
in 1990
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Proportions living in absolute poverty declined between
1960 and 1990 from 58% to 17% in Indonesia and from
37% to 5% in Malaysia (compared with 54% to 43% in
India)
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HPEAs also achieved low and often declining levels of
income inequality, particularly in Japan and Taiwan but also,
until the 1980s, in S. Korea and Singapore.
Explanations of Rapid and Equal
Development
Rapid Development in East Asia is, to some
extent, a regional phenomenon.
Explanations have focused on:
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Culture
Geopolitics
Timing
Policies (including education)
Culture
Cultural explanations of EA development include
theories about ‘Confucian’ Capitalism:
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Strong states and Confucian paternalism
Mobilization of national identity
Family Basis for Welfare
Use of Diasporas and Flying Geese pattern
Importance of Education
However, theories are generally insufficient to
explain dynamics and timing of development
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East Asia is highly diverse in ethnicity and
religion
The Importance of Geography and
Geo-Politics
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Proximity to sea lanes and historic trade routes
Advantages of island and peninsular states – coastal towns
Cold War stimulus to investment
US and British investment high in Japan, South Korea,
Singapore, Hong Kong and Taiwan through period of Korean
and Vietnam wars.
Between 1953 and 1958 US aid to Korea was 15% of GDP
and war requisitioning helped to kick start the Chaebols.
Singapore benefited from UK and US requisitioning.
Up to 50% of finance for Taiwan’s infrastructure in early
years came from US aid
Geopolitics can only be part of the story. Some states
which benefited did not develop (Philippines) and others
(Malaysia, Thailand) developed rapidly later, without similar
levels of cold war investment.
Timing
The timing for the first wave of East Asian growth
(second phase for Japan) was highly propitious.
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Buoyant global economy in 1960s
Flexible trade regimes
US cuts in Japanese imports helped tigers
Conditions for rapid growth now less good
Slower world economic growth
More NIC competitors
WTO limitations to trade policies which arguably
helped tigers
Globalisation restricts use of capital controls
which may also have helped tigers
Factors favouring egalitarian
development
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Weakening of old landed and Zaibatsu elites in Japan as
result of WW2 and subsequent land reform
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Land reform in 1950s in Taiwan and S. Korea (prompted by
US!) redistributed landed wealth and removed antimodernising elites
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Agricultural improvements in EA states with agricultural
economies reduced disparities or rural and urban incomes
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Rapid improvement in access to education reduced growth
inequalities (countering the usual Kuznets effect)
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Developmental states overcame entrenched class interests?
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Redistributional policies of governments ie Malaysia pro
Malay business policy, Singapore and Hong Kong Housing
programmes etc
Policy Explanations of Growth
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Neo-classical economics
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Market friendly neo-classical
economics (WB East Asian Miracle)
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Developmental state theory
(Amsden, Wade, Johnson etc)
Neo-Classical theory
Neo-classical economic explanations argue that East Asian states
got the basics right and left the rest to the market:
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Private domestic investment and rapidly increasing human capital
were principal engines of growth
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High domestic savings sustained high investment (typically
savings at over 30% of income)
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Increased agricultural productivity
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Effective public administration
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Good macro-economic management (low inflation and borrowing;
stable exchange rates etc
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Openness to trade
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Export led growth
Developmental State theorists
DST does not disagree with view that human
capital and investment were important and that
export led growth was central.
However, they argue that the conventional
account ignores the degree of state intervention
in growth and the use of ‘neo-mercantilist’
policies which deviated very substantially from
‘free trade.’
With the exception of Hong Kong, Japan and the
tigers all had highly state-led development
programmes. They developed at a much faster
rate than the Malaysia, Indonesia and Thailand
The Crucial Role of the State
Britain, America, Germany, France all used a strong state
for development through national economies in early stages
of growth.
Free Trade Policies only favour the strong and even then
have only been applied selectively.
Alexander Gerschenkron noted the key role of the state in
‘late development.’
Under globalisation there has generally been huge capital
flows from the South to the North except in East Asia
‘where the state is powerful enough to to control capital
flight and direct the economy efficiently.’ Naom Chomsky
Developmental Paths
Each country followed similar development path:
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import substitution and agricultural improvement (late fifties)
export of cheap manufactured goods (early sixties) (textiles; toys;
shoes etc) based on low cost labour
development of capital intensive goods (late sixties /early
seventies) (variously Steel, Shipbuilding; Petro chemicals etc) and
electronic consumer goods
shift to higher value added manufacturing (1980s)
Singapore and Hong Kong relied heavily on FDI since they had
small domestic markets and little domestic capital
Japan, Korea and Taiwan initially prefered foreign loans and
technology transfer through licensing but gradually moved
towards allowing joint ventures and since 1997 foreign MNCs.
Korea copied Japan - large private conglomerates working closely
with state bureaucracy as engines of growth. Taiwan maintained
larger SME sector but created many state owned large companies.
Developmental Policies in Japan
and Tigers
A range of policies used to stimulate economic growth:
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To protect home industries:
Tariffs and import quotas to protect infant industries
Tariffs, protectionist standards regulations and high taxes
on luxury and other goods to discourage unnecessary
consumption, encourage saving and to allow exporting
manufacturers to reclaim losses on marked down foreign
sales through high domestic prices.
To encourage exports:
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Export subsidies; export targets; preferential loans for
exporters; tariff reduction on imported inputs for exporters;
low exchange rates (which helped exporter); export
processing Zones
Developmental Policies in Japan
and Tigers 2
Industrial Policy – building up priority sectors through:
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Preferential loans for companies to develop in certain sectors
Directing credit through Gov’t banks or regulation on private banks
Encouraging sector rationalisation through forcing market exit or forced
mergers of failing companies.
Tax subsidies and infrastructural development for R and D in favoured
sectors.
To Encourage FDI
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Setting up one-stop-shop of Economic Development Boards in Singapore
and Korea
To encourage savings
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Post Office Saving Accounts (Japan and S. Korea)
Mandatory providential fund savings (CPF in Singapore)
Effects of Interventions
Most economists agree that market-governing measures
were widely used in Japan and three tigers in first stage of
development although countries later liberalised. The
argument is about what effect the interventions they had.
Neo-classical economists say growth would have happened
anyway without these policies. Developmentalists say they
were generally beneficial to growth and key to success.
All agree that pre-conditions for market governing
intervention working was that:
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Firms were forced to remain competitive
Interventions were carefully monitored so that subsidies
removed from firms not achieving
Measures required competent and honest bureaucracy.
Role of Education
General view : education played major
role in East Asian Miracle
WB from growth accounting estimates:
‘far and away the major difference in
predicted growth rates between HPAEs
and sub-Saharan Africa derives from
variations in primary school enrolment
rates. (EAM p. 54)
Different Theories of Education’s
Role
Writers on East Asia differ on how they
understand the role of education in rapid
growth. Three theories:
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Human capital theory (WB)
Developmental Skill Formation (Ashton
and Green)
Education and State Formation (High skills
Project)
Human Capital Account
Skills contributed significantly to productivity growth and
technology transfer.
Educational development was successful because it largely
followed the market and was informed ‘sound’ policies:
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HPAEs had high initial levels of literacy (although so did Sri Lanka
and Philippines in 1960s)
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Investment focused initially on universalising primary education
which had highest rate of return
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Secondary and higher education were developed sequentially
when growth and higher rates of return to higher levels
encouraged private investment
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Growth, private investment and declining birth rates (earlier and
sharper than in other developing countries) allowed increased in
per capita spending and higher enrols in education without
excessive public cost.
School Enrolment at Primary Level
Relative to Estimated 5-14
Population in 1960
Tigers
Hong Kong
Singapore
South Korea
Taiwan
57
66
60
67
Others
Brazil
Chile
Ethiopia
Indonesia
Kenya
Pakistan
Uganda
45
69
5
40
49
22
32
Average Years of Schooling
Attained by Population over 15
Latin America
and Caribbean
M. East/ N. Africa
SS Africa
S Asia
OECD
HK
Sing’pore
South Korea
Taiwan
(Barro and Lee, 1996)
1960
1990
3.26
1.22
1.73
1.51
7.05
5.17
4.33
4.25
3.87
5.24
4.47
2.93
3.85
9.02
9.15
5.89
9.94
7.98
Public Expenditure on Education as
% of GNP
1960
HK
S. Korea
2.0
Sing’pore
2.8
Malaysia
2.9
Thailand
2.3
Indonesia
2.5
HPAE av.
2.5
Brazil
1.9
Pakistan
1.1
SSA
2.4
(WB East Asian Miracle)
1989
2.8
3.6
3.4
5.6
3.2
3.5
3.7
3.7
2.63
4.1
Developmetnal Skills Formation
Critique
Developmental skills formation theory (Ashton
and Green) does not disagree with many of the
human capital assertions. However, it claims they
miss:
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Importance and secondary, technical and higher
education expansion in later stages of
development
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The role played by the state in generating
demand for skills
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The role played by the state in coordinating skills
State intervention to increase the
demand for skills
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Through industrial policy to increase
investment in high value added industries
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Through forcing MNCs to bring in more
capital and skills intensive operations
The classic example was the Singapore
strategy for skills upgrading in 1980s
Second Industrial Revolution in
Singapore
Gary Rodan describes Singapore efforts in early 1980s to
shift to a high skill economy when it could no longer
compete with NICs on low cost manufacture.
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Substantial increase in minimum wages
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Tax subsidies to MNCs for hi-tech investment
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Introduction of Skills Development Fund financed from a
levy on employers of 2% of wage costs for all workers
S$750 or less pm
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Encouraging MNCs not wanting to upgrade to exit
Strategy quite successful in increasing high value-added
production in Singapore but had to be aborted in mid 1980s
when labour costs rose to uncompetitive level.
Coordinating Supply and Demand
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Using manpower planning through high level interministerial strategy committees (CPTE in S’pore)
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Setting quotas for enrolments in Secondary and HE (S.
Korea, Taiwan and S Korea till 1980) according to forward
industrial planning
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Revising these when needed
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Brokering deals with MNCs (Singapore through EDB) to
provide skills and for MNCs to provide training abroad and
set up joint training centres in Singapore. French, Japanese
and German technical institutes set up jointly with
government.
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Upgrading technical education rapidly in line with planned
economic strategy (setting up of ITE in early 1970s in
Singapore)
Broader Contribution of Education
to Development
Education in Japan and the Tigers has contributed
to development in various ways:
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Through provision of skills
Through inculcation of work discipline (one days
leave a month in Korean factories in 1960s!)
Through socialisation into ‘survival’ national
ideologies which have helped maintain political
stability
Through popularising meritocratic ideology that
encouraged endeavour
Through other educational policies designed to
enhance equality and social cohesion
Commonalities of East Asian
Schooling
East Asian education and training systems differ
in some significant ways:
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Japan, Taiwan and Korea are highly egalitarian
(Non-selective neighbourhood comprehensive
schools; mixed ability classes; equal resource
distribution between school) – Singapore and
Hong Kong are comparatively elitist
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Japan and Korea have extensive company based
training in large firms. Singapore relies much
more heavily on Gov’t funded workforce
development
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However, they have a number of features in
common (Cumings)
Commonalities of East Asian
Schooling
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Highly centralised administration
(although this is beginning to change now)
Major stress on dissemination of basic
skills
Bias towards Maths and Engineering (20%
get maths A level in Sing’pore and 40% of
graduates are engineers)
Major stress on Moral and Civic education
(made possible by centralised control)
Benefits and Costs of Education
Bias to Maths and Engineering
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Has served growing manufacturing economy well
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Has also produced competent civil servants (In
Singapore they say engineers make best civil
servants)
However, lack of creative education has not
necessarily been good for producing creative and
entrepreneurial talents. Singapore compensates
for this by importing foreign talent, but all Japan
and tigers all now complain of lack of creative
skills in leading edge science and business
innovation.
Importance of Socialisation
Arguably the most important contribution of education to
economic development in Japan and Tigers has been
through effective youth socialisation
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Encouraging disciplined attitudes to hard work
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Generating ‘national spirit’ of struggle and sacrifice in early
generation (to encourage saving and effort and acceptance
of overpriced consumer goods etc). Koreans went en mass
to pubic collection centres to hand over their silverware
during the economic crisis! Japanese have put up with
over-priced Japanese rice for years because they have been
convinced it is patriotic!
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Creating ability to work in teams (more notable in Japan
and Korea than Singapore perhaps)