Building Human Capital in East Asia: What Others Can Learn

While recognizing that education contributes to economic growth, investments in human capital contributed to high economic growth and also to better income distribution in East Asia; and human capital, in turn, received dividends from these two gains on the economic front. This paper presents an analysis of investments in human capital, specifically education, in East Asian economies. It presents a review of past trends in education, the policies followed by East Asian economies for the development of education, the emerging issues and lessons that the East Asian experience offers to other developing economies particularly those in transition). Three important dimensions of patterns of expenditure on education that are given serious attention in this paper are (a) allocation of resources to education as a whole, (b) allocation of budgetary resources between different levels of education (primary, secondary, and higher), and (c) the role of the private sector in education.