According to the most recent World Bank estimates, worldwide spending on education in 2008 came to 4.6% of Gross Domestic Product. That is, for every $100 spent by anyone on this planet – be they government, corporation or individual – $4.60 was spent on education. This adds up to a vast sum of money, and serves only as a proxy for the collective resources of humanity poured into education. But are all of these resources being directed in the best possible way? Are we investing not only in education that works, but also in education that represents the wisest use of our scarce and finite resources? In short, in these times of economic crisis, are we delivering best possible value for money?
This Special Issue of Educational Research is concerned with addressing some of these questions, and brings together a diverse range of papers from both economists and educationalists. Education has many stakeholders: policymakers, local government, teachers, parents and of course the learners themselves. Any question about value for money must define – or perhaps assume – what constitutes value, and to whom that value accrues. It is differing premises in these respects that neatly segment the five papers we include here.
Theodore Breton assumes a perspective aligning most closely with a finance minister or international development agency. At the outset lies an intriguing dilemma: should education be considered consumption, a product found at the end of the value chain, a luxury to be cut in times of austerity; or is it investment, an essential factor of production akin to a factory or other form of capital, and which should therefore be protected in the interests of recovery? By undertaking an analysis of time series data from a large number of countries, Breton presents evidence in support of Schultz’s theories that education is an investment, and plays a key role in a nation’s economic growth.
However, the marginal returns (i.e. the return for each additional unit of investment) diminish amongst more highly educated nations. This raises the prospect that a point may be reached amongst developed nations whereby further investment in education can no longer be justified on the grounds of economic growth, at least when considered against other competing priorities. Value for money in this context can therefore be considered in terms of governments choosing optimal levels of investment in education, to the economic benefit of a nation as a whole.
One cannot stop there, however: not all investment has equal impact. It is one thing determining how much to spend on education, it is quite another knowing how to spend it. Macroeconomics provides useful tools for policy makers in setting overall strategic direction. However, the toolkit of microeconomics and associated statistical techniques is needed as a guide for policy makers in a ministry of education, local education authority or school in determining how to spend scarce resources. It is to these questions that our next three papers turn, focussing on examples from the United Kingdom, South Africa and Denmark, respectively. For each of these, value for money can be considered as maximising a particular set of educational (or wider societal) aims within the constraints of limited public funds.
Stephen Machin, Sandra McNally and Gill Wyness present a comparative review of the approaches taken by each of the four ‘home nations’ of the United Kingdom. Each face broadly similar macroeconomic environments, with similar levels of taxation, benefits and overall expenditure, but political devolution in 1998–99 further increased existing powers to determine their own educational policies (i.e. to make their own choices on how to achieve maximum value for money). This paper explores various aspects of policy and practice including school type and governance, curriculum, pedagogy, choice and competition, the evidence relating to these, and differences and similarities between educational attainment in each country. However, the authors point out a common difficulty in moving from macroeconomic concepts of return on investment, to evaluation of specific policies. Translating immediate measurable outcomes such as educational attainment into the wider economic benefits considered by Breton, and being able to measure the full costs of competing policies in a consistent fashion, are far from straightforward. This makes judgements around the value for money offered by large-scale initiatives or reforms of the education system very difficult to make.
In our third paper, Constance Khupe, Kevin Balkwill, Ruksana Osman and Ann Cameron argue that the particular challenge in South Africa is persistent inequality between schools, following pre-democracy patterns. They present a prime example of how ‘throwing money at a problem’ will not necessarily provide solutions, however great the sum of money. In reviewing the literature on school improvement strategies the authors conclude that these are only effective when they take a system-wide approach, recognising the complex interplay between teachers, school leaders, the structures they operate within, and the wider communities they serve. They consider three aspects often considered in evaluating value for money: economy, efficiency and effectiveness. Narrow interventions targeted, for example, just at improving test scores may perform well in terms of economy (keeping costs to a minimum). However, it is only interventions aimed at whole-school development which reliably deliver in terms of efficiency (maximising outputs, defined by the authors here as higher quality teaching and learning) – and effectiveness (achieving the ultimate goals of improving performance and reducing inequality in educational attainment). The authors also call for greater dialogue between the variety of stakeholders in school improvement, including government, private donors and research institutions, to achieve a common understanding of value for money – a call that resonates with the theme of this Special Issue.
At the heart of any education is of course the time pupils spend in the classroom. So, does increasing the number of classroom hours each pupil receives represent a good use of scarce resources? Vibeke Jensen explores this question through the lens of school reforms in the Danish school system. The reforms decreased flexibility in classroom planning, guaranteeing minimum classroom hours in certain subjects and resulting in some reallocation of resources by municipalities (the local education authorities). Jensen finds that classroom hours have a positive impact on student performance in maths, but not in literacy. Municipalities could therefore implement two very similar initiatives with similar levels of funding, one aimed at increasing classroom hours in maths, and the other in literacy, and yet the two would provide quite different results in terms of value for money (value here being considered increasing test scores). This provides another example where to achieve value for money within education, one must not only provide sufficient investment, but the investment must also be suitably directed.
In our final paper, Wu Xiaoxin introduces another important perspective: that of parents and pupils. A case study is provided of the role cultural, financial and social capital play in securing school places in Nanning city in China. Intense competition for places at the best schools results in the investment of substantial resources by some parents. This takes the form of the direct costs of payments to schools, and indirect costs, such as buying property in the catchment areas of good schools and the cost of extracurricular classes for their children. This is in contrast to the situation in developing countries, where – as Breton observed earlier – the long-term and uncertain nature of returns from private (parental) investment in their children’s education means that this rarely occurs. A further contrast is found with Breton whereby education appears to function as a form of consumption, bought and sold in a market, rather than as a macroeconomic investment by central government. In fact, both seem to be true – government are nevertheless substantial funders of education, and clearly parents are motivated to a greater or lesser extent by the returns (be they economic, social or cultural) expected as a result of their children receiving a higher quality education.
The very fact that parents incur the costs implies that they must consider them to represent good value for money in some sense, at least in the narrow context where this is compared with the alternative of not making the payment and attending an inferior school. Value for money here is defined in terms of the private decisions and preferences of individual citizens. This is quite a different question from whether the overall system represents good value for money in optimising the level and distribution of funding for education in the city – a good example of how the perspective one takes is crucial in judging value for money in education.
Given the range of perspectives illustrated in this Special Issue, it is perhaps surprising that in all of the responses to our Call for Papers, there was relatively little engagement with this more fundamental question of how ‘value’ should be defined. For the most part this was simply assumed. In each of our five papers, education is valued as a means to an end by a particular stakeholder group. This is in spite of the fact that the contributors include economists and educationalists. Furthermore, there is an alternative view of education and learning as inherently valuable, as an integral part of any civilised society. Indeed, Article 26 of the Universal Declaration of Human Rights enshrines the notion of education as a fundamental right. This would imply that best value for money is achieved through maximising the coverage of basic education, with the economic or social returns being of secondary importance. Whether one subscribes to such a point of view or not, it nevertheless illustrates the danger that certain perspectives on how to conceptualise value for money in education are neglected.
It is also the case that we can fall into the trap of valuing only that which is easy to measure. This is fine for the pragmatist if it nevertheless enables us to make a robust case for appropriate levels of investment in the best possible education. However, current efforts to extend the scope of measurement – for example from cognitive skills to include social and emotional skills – must be welcomed. To ignore these would constitute a double fallacy: firstly, these additional skills can also play an important role in economic success; and secondly one might argue that these skills are themselves inherently valuable, and an objective of an effective education alongside cognitive and economic aims. Another development that must be welcomed is greater use of randomised controlled trials and natural experiments to provide robust evidence of causal relationships between policy, practice and outcomes. A rigorous impact evaluation underpins any assessment of value for money, and is an area where future collaboration between economists and educationalists should be encouraged.
Nevertheless, the challenge remains that value judgements and value for money remain intertwined. These are judgements that we must make collectively as a society, and go beyond the prescriptive remit of educationalists and economists alike.