Last night, Stephen Lewis (former Special Envoy to the U.N.) lectured on "Winning the Battle Against Poverty & Disease in the Developing World".
He covered the eight millennium development goals, lamented the effects that the world financial crisis is having on the developing world, and spoke passionately about the need for policy reform and direct aid to the millions suffering and dying in Africa.
While discussing the education MDG, he briefly touched on an adverse secondary effect of a well-intended policy by the World Bank and the IMF: Tying development aid to the requirement that the recipient nation impose user fees for health care and education. He noted faulty econometric modeling as a cause, but did not go into detail.
This morning I've been doing some research on the issue... why in the world did the World Bank and the IMF think it would be a good idea to charge the poorest people on the planet fees for basic health care and education? After all, public education is free in Beverly Hills California, where median income is around $90,000 and the median house price is well over $2 million.
The policies were enacted as a means of "cost-sharing" or "cost recovery", where the rationale is that by imposing nominal fees for these services, revenue will be generated that can be used to provide higher quality services to more people.
Here is some reading:
Arguments for cost sharing
Arguments against cost sharing
There's a lot more out there. To me this seems to be a question of basic microeconomics. Do you see it? What did the IMF and World Bank assume that turned out to be false? We'll talk about the issue in class today.