Pakistan Institute of Development Economics



State, Education, and the Market

The tail of the tail-end of the 2nd millennium has taught the humankind two valuable lessons: democracy and the market, although imperfect, have succeeded where other systems have failed. What is clear is that the most successful systems are aligned to humankind’s predispositions rather than being inimical to them. Insofar as it aligns itself with the predisposition to greed, consistently regulated capitalism terms out to be the most efficient economic system hitherto observed in human society. Likewise, democracy works by aligning many people’s desire for power with a governance system which on balance is helpful to the general population, unlike various forms of totalitarianism. But recent movements for both capitalism and democracy in many developing countries largely do not subscribe to humankind’s predispositions, rather they appear to be a part of the headlong global trend towards these paradigms. The reason being that the most important ingredient, common to both recipes, is lacking in many developing countries: that is the popular pressure and mobilisation which is sufficiently informed of its duties and rights. This ingredient is most important as it forces out the authoritarian rule whether, totalitarian or ‘democratic’, and makes democratic governance drive the market to the maximum benefit of society. The central thesis of this work is that this most important ingredient is the result of an effective and efficient system of public institutions for free and compulsory universal primary schooling which, if the resource constraint could be overcome, ought to be supplemented by free and compulsory secondary schooling.

Naheed Zia Khan