The globalization debate has largely been fought between those who prophesize a "race to the bottom" in government expenditure and those who foresee continued divergence, with some states better shielded from global economic volatility. However, over the past few decades there has, in fact, been "upward convergence" in the percentage of national income governments devote to public education, albeit amidst considerable cross–national variance. This phenomenon has an enormous distributional impact, yet it has been largely neglected by political scientists. What explains this tremendous shift? This paper argues that two forces in particular shape the aggregate pattern of human capital expenditure: the level of democracy and the level of openness of any given state. By developing a model of the political economy of education investment, and testing its implications over a dataset of 115 countries from 1960 to 2002, this paper provides a first cut at explaining this critical issue.
Working Paper 06–01, Weatherhead Center for International Affairs, Harvard University, 2006.