The Economics of Social Justice

Shanta Devarajan

World Bank

www.worldbank.org/futuredevelopment

To achieve social justice

• 135 countries have constitutional provisions for free and non-discriminatory education for all

• 73 U.N. member countries guarantee the right to medical care services

• 41 countries have enshrined the right to water within their national constitutions, or have framed the right explicitly or implicitly within national legislation

Note: These rights are aimed at protecting poor people

Education: Completion rates

Mali, Access to school according to income level, 2006

Source: Calculations from household survey data

2% 5% 8% 9%

94%

23%

31%

39%

53% 59%

67%

98%

0%

20%

40%

60%

80%

100%

Access to

primary

Primary

completion

Acces to lower

secondary

completion of

lower

secondary

access rates to

upper

secondary

completion of

upper

secondary

Poorest quintile

2nd quintile

3rd quintile

4th quintile

Richest quintile

Education: Learning outcomes

Source: Annual Status of Education Report (Rural), 2012

MENA Region underperforms

Jordan Qatar

Singapore

Tunisia

UAE

Vietnam

350

400

450

500

550

600

7 8 8 9 9 10 10 11 11 12 12

PIS

A M

ath

20

12

Log GDP per capita

PISA Math 2012 scores

Benin

Botswana

Angola

Cameroun

C. Verde

CAR Chad DRC

Congo

Costa Rica

Equatorial Guinea

Eritrea Ethiopia

Gabon

Ghana

Guinea Liberia

Lybia

Mauritania

Mauritus

Mozambique

Namibia

Niger

Nigeria STP

Seychelles

South Africa

Sudan

Tanzania

Uganda

Tunisia

0

100

200

300

400

500

600

700

800

900

1000

30 40 50 60 70 80 90 100

Tota

l healt

h e

xpendit

ure

per

capit

a (

US$)

Immunization, DPT (% )

Immunization vs. Total health expenditure (2010)

24x7 water: A pipe dream?

Source: Data collected from the water boards or utilities

per capita lpd vs. hours of supply/day Goa

Chandigarh

Mumbai

Delhi

Patna

Ludhiana

Jodhpur

Dasuya

Dera Bassi

Paris

Jaipur

Ahmedabad

Bikaner

Bangalore

Gurdaspur

Bathinda

Bharatpur

Udaipur

Chennai 32

80

105

106

108

123

133

145

149

173

184

190

220

222

223

240

332

341

1.5 2.5

1.5

8

10

2.5

1.5

2

3

8

10

2.5

10

10

4

5

10

8

24 150

Service to the poor is big business

What went wrong?

• Assumed government should finance and deliver social justice (education, health, water, etc.)

• But governments have constraints

– Resources

– Capacity

• With limited resources, governments should spend on:

– Public goods, externalities

– Redistribution

Resources have been captured by the non-poor Distribution of Health Care Subsidies All India, 1995-6

0

5

10

15

20

25

30

35

Poorest II III IV Richest

Hospitals

Primary Health

Centers

Public Spending on Education

Indonesia

1 (poorest) 4 7 10 (richest)Deciles

Su

bsid

y p

er

cap

ita o

f

decil

e Primary

Tertiary

Country (year) % of cash/in-kind resources leaked

Resource Category

Kenya (2004) 38 Non-salary budget

Tanzania (1991) 41 Non-salary budget

Uganda (2000) 70 Drugs and supplies

Ghana (2000) 80 Non-salary budget

Chad (2004) 99 Non-salary budget

Source: Gauthier (2006)

Leakage of resources in health

Capacity constraints lead to poor quality services

All India Teacher Absence Map (Public Schools)

State

Teacher

Absence (%) Maharashtra 14.6

Gujarat 17.0

Madhya Pradesh 17.6

Kerala 21.2

Himachal Pradesh 21.2

Tamil Nadu 21.3

Haryana 21.7

Karnataka 21.7

Orissa 23.4

Rajasthan 23.7

West Bengal 24.7

Andhra Pradesh 25.3

Uttar Pradesh 26.3

Chhatisgarh 30.6

Uttaranchal 32.8

Assam 33.8

Punjab 34.4

Bihar 37.8

Jharkhand 41.9

Delhi -

All India Weighted 24.8%

Source: Kremer, Muralidharan, Chaudhury, Hammer, and Rogers. 2004. “Teacher Absence in India.”

Public School Teachers are paid a (lot) more

1231

1619

6178

5299

0

2,0

00

4,0

00

6,0

00

Sala

ry in R

s.

Private Public

Unadjusted Adjusted Unadjusted Adjusted

Teacher Compensation• Definitions

• Unadjusted Wage is the average wage of teachers in the public and private sector

• The adjusted wage is what a 25 year old female with a bachelors degree and a 2-year teacher training course residing locally would earn in the public and private sector

-40

0

-20

0

0

20

0

40

0

60

0

Dev

iati

on

fro

m M

ean

Sal

ary

in R

s

0 10 20 30 Days Absent per Month

Private Schools Public Schools

Teacher Absenteeism and Compensation

The private sector pays more absent teachers less

The public sector pays more absent teachers more

Salary results are presented as “deviations from mean”. So the number

200 on the vertical axis means that the person’s salary is Rs.200 more than the average salary for the sector The figure is based on a non-parametric

plot of deviations from mean salary against

the number of days absent.

India 2003: Doctor absence from PHC’s by state and reason

0

10

20

30

40

50

60

70

80

Bih

ar

Jhar

khan

d

Oris

sa

Utta

ranch

al

Utta

r Pra

desh

Ass

am

Raj

asth

an

Mad

hya P

rades

h

Chhat

isgar

h

Wes

t Ben

gal

Andhra

Pra

desh

Kar

natak

a

Tamil

Nad

u

Mah

aras

htra

Guja

rat

Har

yana

Punja

b

Official Duty

Leave

No reason

Staff absenteeism in MENA

What is to be done?

• Information (93 countries have right to information laws)

Primary Education in Uganda (PETS)

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

1990 1991 1993 1994 1995

US$ per

Student

Intended Grant Amount Received by School (mean)

1999

Grants for Primary Education in Uganda

• In 1995, survey of 250

primary schools in 19

of 39 districts;

Primary Education in Uganda (PETS)

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

1990 1991 1993 1994 1995

US$ per

Student

Intended Grant Amount Received by School (mean)

1999

Grants for Primary Education in Uganda

• In 1995, survey of

250 primary schools

in 19 of 39 districts;

• Survey repeated in

1998 and 2000.

What is to be done?

• Information

• Cash transfers for redistribution

Indicator/Country Angola Equatorial

Guinea Gabon Mozambique Nigeria

Republic

of Congo Tanzania Uganda

Type of Resource Oil Oil Oil Natural gas Oil Oil Natural

gas Oil

DDT per capita per year at 10%

distribution (US$) 199 978 407 39 37 183 3 10

DDT as % of average poverty depth at

10% distribution 61 235 172 37 38 88 9 21

Poverty Depth as % of Natural Resource

Fiscal Revenue 6 3 2 15 14 6 38 12

Poverty Depth as % of Net ODA 954 265 112 70 401 32 18 23

Give The Money To The People