The evolution of public investment in the Ecuadorian educational system

The evolution of public investment in the Ecuadorian educational system

The significant socioeconomic impacts of education suggest the need for a strong government intervention. In Ecuador, the educational sector is considered ‘a priority in the public policy and investment, a guarantee of the equality and social inclusion, and an essential resource for the ‘good living’’ (Asamblea Nacional, 2008). Consequently, public investment in education needs to be strengthened and supported by policies that aim to guarantee students’ rights to a quality learning, as well as a multidimensional, participative, intercultural and inclusive education. According to Paul Krugman (2009), public investment in education is a key driver of long-term economic success. Likewise, Joseph Stiglitz (2000, 2015), states that the market assigns a pay-premium to workers with higher levels of schooling and with higher quality education, thus ‘public investment in education is fundamental to address inequality’ (2015, p. 21). 

In Ecuador, public investment in both the social and education sectors have grown consistently, despite recent decreases in total public spending. As shown in Figure 1, Ecuador increased government spending until reaching a peak of $27,581 million (current prices) in 2012, 187% more than 2006. After the 2013 restructure of public spending, due to restrictions and deficits in the balance of trade, total government spending decreased by 28.6%, following a declining tendency that reached $17,807 million in 2015, exacerbated by the drop in oil prices and the dollar appreciation. However, as shown in Figure 1, education and social investment were not affected by this measure. Figure 2 shows that, as a percentage of GDP, social investment reached 9.7% and spending on education reached 4.5%[1] in 2015, having grown by 129.2% and 93.5% respectively, as compared to 2006. These steady increases suggest the priority of the social and educational sectors to the government’s agenda.

Figure 1. Evolution of total, social and educational government expenditure

Notes: Public investments measured in nominal terms

Source: BCE, 2016; Senplades, 2016

Figure 2. Evolution of public investment in the social and education sectors, as a proportion of GDP

Notes: GDP and social and education public investments measured in nominal terms

Source: BCE, 2016; Senplades, 2016

In regional terms, despite having an average investment in education as a percentage of GDP, Ecuador shows the largest increase of this indicator since 2006. Figure 3 illustrates that Ecuador’s relative investment in education is identical to Chile’s and very close to Colombia’s and the regional mean. However, while the Latin-American average grew by 28.9% compared to 2006, the Ecuadorian grew by 94%, the largest in the region.

Figure 3. Investment in education as a percentage of GDP, regional comparison
 

Notes: Extrapolation of CEPAL (2016) data, applying moving averages of order 3 (MA3) for 2015, except for Ecuador. Ecuador applies the complete data from Senplades (2016). GDP and social and education public investments measured in nominal terms.

Source: CEPAL, 2016; Senplades, 2016

In this context, Ecuador has outperformed in public investment in education during the last decade, with important improvements in the educational system. This has been achieved by a considerable number of educational policies and regulations. Among the regulatory milestones reached, it is important to highlight the creation of the ‘Plan Decenal de Educación’ (2006) and the ‘Estándares de Calidad Educativa’ (2012), which defined key educational goals and a roadmap for the improvement of the educational system. Data from the Integrated Sistem of Social Indicators (SIISE) (MCDS, 2016) provides evidence in favour of inclusive educational policies, with universal primary education (EGB) having reached a net attendance rate of 96.3%, as well as substantial improvements of this indicator for the secondary education (BGU), which increased by 55% compared to 2006, reaching a 68% net attendance rate in 2015. Likewise, schooling years increased from 8.8 years in 2006 to 10,1 years in 2015, while the dropout rate decreased substantially, reaching a 3% in EGB and a 5.6% in BGU by 2015. There have also been considerable reductions in gender inequality in terms of educational access, as well as reductions in the gender gap, as shown in the ‘Ser Bachiller’ standardized tests. Finally, the literacy rate increased substantially until reaching a 94.5% in 2015.

In conclusion, despite the external shocks, the policies towards education and social welfare have remained a priority in the public investment agenda. Since 2006, the educational system has benefited from sustained improvements in public investment, having increased by $3,419 million and reaching $4,508 million in 2015, a 314% increase. As a percentage of GDP, there has also been an increasing trend, reaching 4,5% of GDP in 2015, 94% more than in 2006 (2.3% of GDP)[2]. Despite these achievements, it is recommended to study the quality of the investment in education since, as some authors[3] have noted through statistical analysis and econometric modelling, signs of inefficiency and lack of equity of these investments have been found.

REFERENCES

Asamblea Nacional. (2008). Constitución de la República del Ecuador. Montecristi.

BCE. (2016). Cuentas nacionales. Banco Central del Ecuador, Cuentas Nacionales, Quito.

CEPAL. (2016). Estadísticas e indicadores. Comisión Económica para América Latina y el Caribe. Recuperado el 10 de 10 de 2016, de http://estadisticas.cepal.org/cepalstat/web_cepalstat/estadisticasIndicadores.asp?idioma=i

Jaramillo, J. (2016). Reformas educativas en Ecuador, su impacto sobre la eficiencia y equidad. http://ecuanomica.blogspot.com/2016/11/reformas-educativas-en-ecuador-su.html

Krugman, P. The Uneducated American. The New York Times. http://www.nytimes.com/2009/10/09/opinion/09krugman.html

MCDS. (2016). Sistema Integrado de Indicadores Sociales del Ecuador. Ministerio Coordinador de Desarrollo Social del Ecuador. http://www.siise.gob.ec/agenda/index.html?serial=13

PNUD. (2015). Reporte de Desarrollo Humano 2015. Programa de las Naciones Unidas para el Desarrollo. http://hdr.undp.org/en/2015-report

Senplades. (2016). Sistema Nacional de Información (SNI). Secretaría Nacional de Planificación y Desarrollo, Quito. http://app.sni.gob.ec/web/menu/

Stiglitz, J.E. (2000). Economics of the Public Sector. Third Edition. New York, W.W. Norton.

Stiglitz, J.E. (2015). Inequality, Living Standards and Economic Growth. http://www8.gsb.columbia.edu/faculty/jstiglitz/sites/jstiglitz/files/2015%20Inequality,%20Living%20Standards.pdf

UNESCO. (2015). La educación para todos 2000-2015: logros y desafíos. Organización de las Naciones Unidas para la Educación, la Ciencia y la Cultura. París: Unesco. http://unesdoc.unesco.org/images/0023/002325/232565s.pdf

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[1] In constant prices of 2007, the investment in education reached 5.23% of GDP in 2015. A 4.5% investment in education is also the average of ‘High Human Development countries (PNUD, 2015).

[2] These achievements in social and educational investment in Ecuador are the largest in Latin America and are consistent with the main strategy of the Education for All program: “Increasing considerably the public investment in basic education” (UNESCO, 2015).

[3] See, for example, Jaramillo (2016).