Hunter, Wendy, & Brown, David S. (2000). "World Bank Directives, Domestic Interests, and the Politics of Human Capital Investment in Latin America". Comparative Political Studies, 33(1), 113-143. http://www.csa.com/ids70/gateway.php?mode=pdf&doi=10.1177%2F0010414000033001005&db=sagepol-set-c&s1=80ee883868977a98ef5390896262f864&s2=33b0a246702c8a4b341473fa4c93e069
“Do international financial institutions significantly affect the development strategies their borrowers pursue over do domestic forces prevail over IFI influence?” (113). IOs are teachers, tutors, etc., but are the countries learning? This study focuses on the learning end of the relationship. “Our findings suggest that the World Bank has not had a significant impact on human capital investment in
This article then turns its focus to the varying returns on investment in different areas of human capital development. It states that the empirical work of Schultz (1959, 1963) show that, “social returns on investments in human capital are greater than those on physical capital in the developing world, and…investments in basic education yield higher returns than those in higher education” (115). The argument is extended casually, and our authors posit that most of the beneficiaries of higher education investment are those who are already well off and who do not need the investment. “…an integral tenet of neoliberal social reform is that public resources [must] not be allocated to those who can afford to pay for private social services” (116). And, “…IMF officials are particularly determined to eliminate market distorting mechanisms like price supports and subsidies as well as nonessential social items. Cutting out free university education is consistent with this approach” (118).
The study then deploys an analytical approach to answering its hypothesis. They want to see whether or not significant investment in a country by BWIs will be answered with adequate change in social programs on the ground. It should be shown that as WB investment in countries increases, government subsidies to higher education decrease. This will happen partially by a virtue of the influence of technicos, or technocrats who are trained in the West and who carry western values.
Their dependent variables are central bank, “expenditures on both education and health,” expressed as a relation to GDP (122). There are four DVs. The independent variables are as follows: concentration of world bank project lending, lagged DVs, gross domestic product per capita, economic growth, debt service ratio, domestic political institutions and population (122-5).
The results: “The consistent finding across such a wide array of indicators offers strong evidence that the concentration of World Bank funding exerts little influence on social policy…it appears that the World Bank’s efforts to persuade its clients to shift spending toward programs that invest in human capital have met with little success” (127). The statistically significant variables are the lagged DV and GDP growth with an overall r-squared of over 95%. Further results show that World Bank lending to education doesn’t match up with government spending (or rather, how governments should be spending according to World Bank assumptions).
The author then draws on examples from
They conclude that their, “…field research suggests that domestic political forces prevail over international technocratic linkages when it comes to redistributive social policy making” (138). One explanation for this in relation to earlier periods is that, “early stabilization measures and market reforms were launched by a small number of high-level officials in an atmosphere of secrecy and crisis. Current reforms, by contrast, are taking place during a longer time frame and in a relatively open political atmosphere, inviting politicians and interest groups to intervene” (139).
