Wednesday, June 13, 2012

The Human Capital Theory and International Education for Development

The second Millenium Development Goal (MDG), achieving universal primary education, has garnered a lot of attention since the goals were officially established in 2000 following the Millenium Summit. It has brought to the forefront of the international development world the role that education can play in a country’s economic development.  The general belief is that education leads to
knowledge and innovation.  Education is also arguably the most important tool for socialization.  Ideally, education will lead to personal enjoyment and fulfillment, as well as a broader understanding of the world.  An educated person is expected to develop interests in his or her community and make attempts at innovation in order to better his or her position, leading to economic prosperity.  This hypothesis is one that development organizations have made permanently.  Thus, development agencies and their partners, in order to fulfill the second MDG by 2015, have made universal education a priority. 

The idea that education is the driving force behind economic development is certainly not new.  Its roots can be found in 18th century American economic theory when economists began discussing the link between one’s effort and his wealth.  The theory and consequent field of study became known as the Human Capital Theory (HCT).  Officially established in 1960, it garnered attention when economist Theodore Schultz asked his fellow economists to explain why personal income and the standard of living in the U.S. had risen to be much higher than the combined amount of land, man-hours, and stock of capital could account for.  Many studies were undertaken and within a few years, the results showed that personal income was on the rise due to increased levels of education.  Essentially, what these economists found was that, “education renders people more productive, that is, it raises the marginal product of an educated worker relative to one not so educated.”  Increased levels of education were linked to increased personal wealth, which overall led to a higher standard of living.  This is the core pillar of HCT.  Since these findings, international development groups have adapted this theory for their purposes.

At this point, an explanation of the context in which HCT became a major pillar of development agencies' strategies will be beneficial.  Everyone knows that after 1945 the U.S. became a global superpower.  As a financial and political leader, even the European nations looked to the U.S. as a model for recovery.  Due in part to free market capitalism and social democracy, Europe also eventually made a recovery from World War II.  Since the successful recovery of the U.S., and to a lesser extent Europe, after World War II it is a widely held belief among Western nations that increasing educational outputs and innovation is the key to economic development.  Consequently, the leap has been made that development as it happened in the U.S. and Europe can be repeated in the developing world. However, more evidence is available that opposes this theory than substantiates it.  The fundamental contextual differences between the western world as it developed into modern society and today’s developing world are vast and complex.  Can we really expect these two dissimilar worlds to develop in the same way?  This is an ongoing debate.

Although HCT has widespread support within the development community, there are more than a few critics of the theory and the development practices upon which it is based.  These issues all have implications for development efforts as we know them, and as such deserve attention and discussion, not just within the academic field of study, but also within the development field on the ground.  In an attempt to synthesize the myriad criticisms and limitations of HCT as it applies to international education as a priority for economic development, I have compiled a list of recurring themes, which will be more broadly expanded upon in subsequent articles.  The themes and their practical examples to be discussed are as follows: HCT is a Western theory with Western foundations, and as such is perceived by some to be imperialist in nature; the basic economic limitations within the theory; and the need for additional mechanisms other than education to spur economic development.  An in-depth exploration of all of these issues and their relationship to the field of international education for development will follow soon. 


Anonymous said...

(character space is limited. I need 2 parts.)

Captain Kirk here.

"The fundamental contextual differences between the western world as it developed into modern society and today’s developing world are vast and complex. Can we really expect these two dissimilar worlds to develop in the same way?"

The answer is hell no.

Our world is far too dirty.

The innovative solutions of our best and brightest will always be at the mercy of our most powerful.

The problem with our most powerful is that are always politicians.

We only know what they say, rarely what they actually mean and almost never what it is they actually believe.

I belong to the last generation to grow up believing that its nation was an economic super power.

HCT is all I've ever understood America to be in terms of its financial ecology.

What you're too young to understand is that educated Americans and Americans with no formal education weren't nearly as divided as they are today.

The theory is entirely sound.

Everyone made more money when Americans as a whole were a more educated people, because people were willing to work together.

An educated person could start a business and hire someone without a formal education who was willing to learn, and people worked together to create prosperity, without even realizing it.

I'm not referring to any sort of post 1960's counter-cultural love-in style togetherness....I mean recognizing that your fellow man is your brother because its honestly the way you feel.

The reasons we can no longer count on this sort of camaraderie are many, largely due to the fact that WE are now many.

There are more people than there used to be.

We're also a lot less rational and civilized than we used to be.

There are all kinds of organizations and entities whose objective is the very opposite of your own Ms.Dower.

No one ever said that life was fair....but the first people to point out that it should be were the very first Americans.

That spirit of rebellion, independance, and fairness is still alive in the finest Americans of today.

-But we are usually and often out numbered.

I know from first hand experience that understanding why good ideas are rejected, why problems we could easily solve won't go away, and why we can't reach certain goals is because certain people don't want them too....

And that has more to do with investigative journalism on a global scale than international education, which is also necessary in order for questions like yours to be answered.

(continued below?)

Anonymous said...

Captain's log part 2:

Also...what is education? Does someone with a degree from a community college really have a higher education?

Did those unfortunate subjects of the “ITT tech made my life better” commercials understand that their credits are non transferable and their school isn't real?

Our job is to treat one another as individuals.

Our job is to respect whatever is special and unique about an individual who wants to contribute to the world in a meaningful or positive way.

There are things you can do that I cannot...because I ended my formal education when I was a heartbroken young man with jet black bangs, a denim kilt, long johns, and native American moccasin boots. I was also known to wear a cape....and I made it look damn good.

There are things I can do that you can't because I was born with a number of gifts, all of which have been appreciated and praised by various groups of people I've known throughout my life.

What you're referring to isn't really just’s what a person acquires as a result of education.

What I took away from the California institute of the arts, besides my cape,...was Critical analysis.

I may have been born with that now that I think about it.

Am I therefore to be excluded from the world of educated people, even instances when my abilities are equal or even superior?

THAT'S the real problem isn't it? We've turned education into a badge people wear.

Someone who can’t answer my question may easily produce a degree...which says they SHOULD be able to...but they can't.

"Well...I have a degree!" "Well...I'm actually right! -and I can prove it! Behold!"

This is the problem. Education isn't accessible to everyone who deserves it. Neither is love for that matter.

We are not ALL becoming global citizens Ms. Dower.

People with over 200 grand in their bank account are becoming global citizens.

The rest of us are being marginalized, niggerized, inconvenienced and driven further and further into the ghettos of our individual nations.

To address this problem on a global scale will only reveal that they aren't global issues.

As Captain of the enterprise, I'm responsible for the lives of over 430 crew-members.

Star-fleet prevents us from interfering with Alien cultures...but sometimes I break those rules to save lives.

I hope you're willing to do the same.

Thank you Allison.

Kirk out.

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