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Public Expenditure in Education and Economic Growth: A Case Study of Bangladesh Free essay! Download now

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Public Expenditure in Education and Economic Growth: A Case Study of Bangladesh

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Public Expenditure in Education and Economic Growth:  A Case Study of Bangladesh essay previewPublic Expenditure in Education and Economic Growth:  A Case Study of Bangladesh essay previewPublic Expenditure in Education and Economic Growth:  A Case Study of Bangladesh essay preview


assignment in Government Finance


Primary education: The first level of education is comprised of 5 years of formal schooling (class / grades I - V). Education, at this stage, normally begins at 6+ years of age up to 11 years. Primary education is generally imparted in primary schools.

Secondary education: The second level of education is comprised of 7 (3+2+2) years of formal schooling. The first 3 years (grades VI-VIII) is referred to as junior secondary; the next 2 years (grades IX -X) is secondary while the last 2 years (grades XI - XII) is called higher secondary. In secondary education, there are three streams of courses such as, Humanities, Science and Business Education, which start at class IX, where the students are free to choose their course(s) of studies.

Tertiary Education:


The third stage of education is comprised of 2-6 years of formal schooling. The minimum requirement for admission to higher education is the higher secondary certificate (H.S.C). HSC holders are qualified to enroll in 3-year degree pass courses while for honors, they may enroll in 4-year bachelors' degree honors courses in degree level colleges or in the universities completion of master's degree. Higher education is being offered in the universities and post HSC level colleges and institutes of diversified studies in professional, technical, technological and other special types of education.


There are 73 universities in Bangladesh. Out of these, 21 universities are in the public sector, while the other 52 are in the private sector. Out of 21 public sector universities, 19 universities provide regular classroom instruction facilities and services. Bangladesh National University mainly functions as an affiliating university for degree and post-graduate degree level education at different colleges and institutions in different field of studies. But in case of fine arts this university also offers Pre-Degree BFA Course (which is equivalent to HSC).After successful completion of the specified courses, it conducts final examinations and awards degree, diplomas and certificates to the successful candidates.

There is only one medical university namely, "Bangabandhu Sheikh Mujib Medical University", like other public universities, offers courses on a different system where FCPS Degree is offered in the disciplines of medical education; diploma courses are offered in 12 disciplines. MD degree in 15 subjects and MS courses on 8 subjects are also offered.

Public Expenditure on Education Sector

The Government is committed to undertaking structural reforms that are expected to bring significant improvements in the education sector. Bangladesh's commitment to education has been clearly stated in its Constitution and development plans with education being given the highest priority in the public sector investments.

The management of the education system falls under two ministries –

the Ministry of Primary and Mass Education

the Ministry of Education


RADP Allocation

Expenditure (% of Allocation)


Ministry of Education


Ministry of Education














































Theories of Public Expenditure and Economic Growth

The relationship between economic growth and public spending is an important subject of analysis and debate. One central question is whether or not government spending increases the long run steadily state growth of the economy. Some scholars are of the opinion that public expenditure, notably on physical infrastructure and human capital, can be growth enhancing although the financing of such expenditures can be growth retarding in the short run. Increasing government expenditure translates into increased employment in the public sector and increased orders of products from suppliers and firms in the business sector. According to the Keynesian model, if demand increases, business concerns produce more merchandise and services, and the result is a substantial increase in the GDP, far more than the increase in government spending. Budgetary expansion acts as a catalyst to increase demand and production within sectors that do not have direct contact with public demand. Thus, the Keynesian school of thought stresses that an utopian society cannot be achieved and as such there is need for government to interfere through her fiscal operations; notably expenditure.

This key issue relates to the effect of the composition of public expenditure on economic growth. Policy makers and some researchers have argued that expenditure on growth-enhancing functions could enhance future revenue and justify the provision of “fiscal space” in the budget. This discussion part lays out a research strategy to explore the effects of fiscal policy, including the composition of public expenditure, on economic growth, using a time series approach.


Ludan examined the effect of government expenditure on growth for a sample of 96 countries, and discovered a negative effect of public expenditure on growth of real output. Komain and Brahasrene examined the association between government expenditures and growth in Thailand, by employing the granger causality test. The results showed that government expenditure and growth are not co-integrated. Al-Yousif indicated that government spending has a positive relationship with economic growth in Saudi Arabia. Ram studied the linkage between government expenditure and economic growth for a group of 115 countries during the period 1950-1980. The author used both cross section, time series data in his analysis, and confirmed a positive influence of government expenditure on economic growth.

Keynesian School of thought

According to the Keynesian macroeconomic thought, public spending can contribute positively to economic growth. Hence, an increase in the government consumption is likely to lead to an increase in employment, profitability and investment through multiplier effects on aggregated demand.

Peacock and Wiseman’s theory of Permanent influence

Peacock and Wiseman used a political theory to explain the influence of political events on public expenditure. They acknowledged a point made by Wagner that government expenditure depends broadly on revenues raised by taxation as cited in governments would thus be in a position to continue increasing their own expenditures and expanding their role in the economy provided their economies continue to grow through industrialization. On the other hand, individuals may not be prepared to be paying higher taxes in order to finance such increased expenditure.

Musgrave and Rostow’s Stages of development

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