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Misallocation of state capacity?

Walter, Torsten (2018) Misallocation of state capacity? PhD thesis, The London School of Economics and Political Science (LSE).

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Abstract

This thesis examines the allocation of human capital in the public sector. I build a new global school-level database comprising 1.73 million public primary schools in 86 countries to study the allocation of teachers across schools across countries at different income levels. In line with common wisdom, I find a strong negative correlation between schoollevel pupil-teacher ratios (PTRs) and the level of income of a country. More strikingly, I document that the within-country variation in PTRs is also higher in lower income countries. This negative correlation between PTR variation and per capita income is also found within countries over time. Cross-country regressions and cross-district regressions within developing countries suggest that teachers may be misallocated across schools in developing countries: aggregate educational attainment and PTR variation are negatively correlated - even after controlling for differences in per capita income and aggregate PTR. I build a theoretical framework to characterize the notion of misallocation and calibrate the model to simulate counterfactual teacher allocations. I find that aggregate gains in grade promotion from teacher reallocation would be substantial in many developing countries. I finish by discussing the causes and implications of my findings. A case study from Zambia points to lack of managerial capacity and weak enforcement of teacher allocation policies as important underlying factors. A comparison of the distribution of health workers across public primary care facilities in Zambia and England suggests that misallocation of public human resources could also be an issue in other public sectors in developing countries.

Item Type: Thesis (PhD)
Additional Information: © 2018 Torsten Figueiredo Walter
Library of Congress subject classification: H Social Sciences > HJ Public Finance
Sets: Departments > Economics
Supervisor: Van Reenen, John and Bandiera, Oriana
URI: http://etheses.lse.ac.uk/id/eprint/3852

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