3 - Education, Education Finance, and the Economy

Summary

INTRODUCTION

The government of Vietnam emphasizes expanded investment in human capital to accelerate economic growth. This is appropriate in a country where sustaining rapid economic growth is the stated priority of the government. Human capital is widely seen as a key ingredient for growth, although in recent years the quality of schooling has emerged as at least as important as the quantity (for example, Hanushek 2008). In recent years, education policies have changed a great deal in Vietnam, as have the administrative and financial structures to support it. Upper secondary and higher education have expanded rapidly, while disparities in the provision and financing of primary and lower secondary education have probably increased across different segments of the population, despite official commitments to universalize access to basic education and make it more equal. The policy for many years has been to increase the fraction of government expenditure devoted to public education, and the target of 20 per cent was exceeded in 2008. However, and at the same time, education policies have increased the share of the cost of education borne by students, their families, and communities, a process somewhat ironically described as “socialization”.

This chapter examines economic aspects of education, but it is impossible to ignore other factors. It will start with a discussion of enrolment trends and three background issues that have implications for what happens in education: rapid demographic change and urbanization; rapid but geographically uneven economic growth; and the specifically Vietnamese constitutional, administrative, and political structures within which education exists. That is followed by sketches of trends arising from general government policies that impact on how education operates and the effects it has on peoples' lives. These involve changes in education financing, decentralization, deregulation, and governance. The chapter then turns to issues of education proper: access and imbalances; quality; actual and potential schisms and conflicts within the education sector and between different stakeholder groups; equity; and finally, whether or not the education sector is giving society and most groups within it good value for the huge resources it consumes.