UNESCO, the World Bank, and Education Development
UNESCO, the World Bank, and Education Development
The global architecture for aid is mostly contained within the 17 Sustainable Development Goals, which were adopted by the United Nation’s member states in 2015. We’ve discussed goal 4 – the one on education – at length in previous episodes. Today we take a look at goal 17, which aims to “strengthen the means of implementation and revitalize the global partnership for sustainable development.” What is a global partnership for sustainable development? And how does it manifest in education?
With me to discuss goal 17 is Francine Menashy, an Associate Professor in the Department of Leadership in Education at the University of Massachusetts Boston. Her research explores global education policy, international financing of education, and private sector engagement in education.
Francine’s latest book, International Aid to Education: Power Dynamics in an Era of Partnership, provides a critical take on partnerships, arguing that power asymmetries continue to exist.
Citation: Menashy, Francine, interview with Will Brehm, FreshEd, 186, podcast audio, February 10, 2020.https://freshedpodcast.com/francinemenashy2/
Will Brehm 2:47
Francine Menashy, welcome back to FreshEd.
Francine Menashy 2:50
Will Brehm 2:51
So, I want to start with maybe just a context question here. Can you tell me what the Sustainable Development Goal #17 is?
Francine Menashy 3:00
Sure. I am sure most of your listeners are quite aware of the SDGs, which is this huge agenda to address all sorts of economic, social, environmental challenges that are facing humanity. And in particular, most people working in the field of international education know about SDG 4, which is on quality education. But the SDG goal that I think we should be paying a bit more attention to is the last of all the goals, and that’s #17, and it’s on partnership, or as its termed “partnership for the goals.” So, this goal, and the way that it’s framed in the UN SDG declaration, actually acts as the foundation for all the rest of the goals by advocating for increased partnership in order to achieve the whole SDG agenda. So, the other 16 goals.
Will Brehm 4:04
So, basically, SDG 17 is saying that we need partnerships to achieve goal 1, 2, 3, 4, 5, 6, 7, 8…all the way to goal 16. Is that?
Francine Menashy 4:12
Will Brehm 4:13
Partnerships are somehow the most important thing, or a valuable tool, to achieve these goals.
Francine Menashy 4:20
Yes. So, it is framed as this need for global solidarity between all different actors -the state, the non-state sector, the global North, the global South- nobody can achieve the SDGs on their own. We need to work together in partnership with one another. So, in many ways, the SDG agenda is considered dependent on partnership on achieving SDG 17.
Will Brehm 4:45
So, how do we even begin to understand what the idea of partnership is? I mean, I am just thinking here, there’s so many different definitions of what a partnership could be, you know. My wife and I are in a partnership, I am a partner in the structures of FreshEd, you know, I have a partnership with my university in the IoE in London. So, you know, how do we even begin to understand what a partnership even means?
Francine Menashy 5:11
Yeah, I mean, when I say the word partnership, a lot of different definitions pop into my head, too. And I am sure everyone listening has an idea of what a partner is. And it probably brings about pretty positive associations, right. But in trying to define it, it is actually a pretty ambiguous term. And this has meant that in international development and in international aid, people and organizations have taken it up and used it in all sorts of ways. So, for instance, a partnership might be defined as something really practical, like just working together to reach common aims. And in international aid, it often means coordination between actors, or collaboration, or building coalitions, but in this sense, partnerships are for practical reasons. It is very instrumentalist to achieve particular aims and more effective practices.
Will Brehm 6:15
So, that is how they are implied in the SDGs, but you know, are there other ways to think about partnerships that you know, maybe people in development aspire to?
Francine Menashy 6:24
Sure. And even in the SDGs, it goes beyond that. So, partnerships are also defined in the development arena through a more ethical or a more normative lens. So, most often, this is in reference to those on the receiving end of aid. So, local communities, beneficiaries, people in the global South, and how they need to be viewed as partners as well. Because not only would this lead to more effective development practices, but also because inclusion and participation is the right thing to do -that recipients of aid shouldn’t be excluded from the processes that directly affect them. And then finally, this term partnership is often also conflated with this notion of public-private partnership. So, many organizations and people in the development arena argue that the private sector -and you know, I will admit the private sector is huge. It is really anything non-state, but I’m speaking mainly about businesses and foundations- that they must be partners in all of this as well. And so, and even within the SDGs and SDG 17, there is a lot of discussion around public-private partnership. And so, some organizations use this term partnership interchangeably with PPPs with public-private. So, partnership is a huge, vague term that actually has multiple definitions. And over the past decade, especially, it’s become a real buzzword in international aid.
Will Brehm 7:57
Yeah. So, it seems like there is a conflation of different meanings of partnership sort of into one, which maybe is a good thing somehow, maybe it is a bad thing. What do we know about the history of this sort of partnership-based mandate in the aid and development structures that you know, such as the SDGs that we started with?
Francine Menashy 8:21
So, I would trace the real start of this partnership-based mandate to around the late 1990s. So, the 1990s were a pretty interesting time -well, I think they were an interesting time- when the international aid community was going through sort of an identity crisis. So, first of all, you have the end of the Cold War. And during the Cold War period, motivations for development aid were pretty clear cut. Rich country, capitalist governments largely saw international aid, as a way to get the support of post-colonial countries while also promoting democracy and capitalism. So, this was essentially buying allies in the Cold War. But then, with the end of the Cold War, capitalist countries no longer needed to build these strategic alliances or any kind of strategic advantage through aid. Secondly, the development practices and the policies of these capitalist economies, and also multilateral agencies, were very market-based. I mean, some would argue that they’re still very market-based, but then they were largely promoting structural adjustment, which, and especially in education, came under intense scrutiny by the mid-90s when critics really came down hard on structural adjustment programs, they’re widely considered ineffective, they hadn’t spurred substantial economic growth, and they had severe impact on social services, exacerbating all sorts of inequities. And so, by the mid-90s, public perception of aid was that it simply didn’t work. It actually sometimes did harm. And this led to really tempered public support and reduced aid budgets overall, it was a really pessimistic mood. So, this combination of this vacuum in purpose left by the end of the Cold War, and then all this rising criticism of the ethical impacts of all these market-based development policies, it left the aid world in kind of a crisis state, and they were in search of a remedy. And so, a new framing of international aid was needed, that would provide a clear purpose and lend a new legitimacy to aid. And this new framing, or this new narrative, became this notion of partnership. And it was actually an explicit decision that was made by members of the OECD DAC to change the narrative. They wrote a report on this new agenda and development cooperation, and it was also codified in the Paris Declaration on Aid Effectiveness, which was adopted in 2005. So, partnership became the new aid narrative.
Will Brehm 11:10
So, there’s these very clear actors who wanted to, as you said, rewrite the narrative on aid in this sort of post-Cold War moment, or not even post-Cold War, I should say, sort of post-Soviet Union. The end of the Cold War, we have to think about how does aid fit into development around the world. And so, you know, what did -these particular actors that were trying to rewrite the narrative- what did they see the purposes of partnerships as being?
Francine Menashy 11:42
Well, they thought it would be a narrative that could be sold really well to all of those who’ve been critiquing the aid environment over the course of the 80s and the 90s. So, I mean, although this partnership narrative was taken up as a mandate, because new actors agreed that collaboration and coordination, and that sort of thing was needed, the real value of partnership as a development mandate, I think, really rested on this idea of North-South partnership. So, the critiques of development aid that I was just talking about, at that point, were really focused on structural adjustment and on this unethical, top-down nature of aid, and how donors and multilateral organizations from the global North just drove development policies and practices. It was a near completely non-participatory environment. And this was seen as wrong and unethical. But partnership meant that power asymmetries between actors and organizations in the global North and the global South could be reversed, in a sense with recipient countries now considered partners, who not only participated in the design of development programs, but owned them. So, this concept of “country ownership” became core to so many aid policies. So, through North-South partnership, with more country ownership, with more local participation, there would be a change in power relations.
Will Brehm 13:15
It just makes me think, so this is the 1990s, it is like 30 years on from then, how did it go? You know, did the power imbalances change?
Francine Menashy 13:24
So, the partnerships that I have studied and also, I mean, I make this assessment based on all of the, you know, research that I’ve read from other fields, from development studies, from those who have studied partnerships in health and in the environment and in other areas, as they’re currently designed, it appears that partnerships don’t really shift power asymmetries. In fact, sometimes partnerships exacerbate inequities. And this is because although the narrative changed the structure of international aid, the systems, or the architecture of aid, and by that I mean, the system, and the relationships, and the mechanics through which decisions are made on aid and how it’s delivered, and the people and the organizations who really drive the policies and the processes have remained the same. Those in power are still those from the global North. And those who I mean, to put it really bluntly, those who have money, those who have resources.
Will Brehm 14:30
Right. So, the discourse perhaps has changed, but the underlying power structures have not.
Francine Menashy 14:36
Yeah. And even the organizations have changed, and the activities they engage in have changed. But the structure of international aid has really fundamentally remained the same.
Will Brehm 14:50
So, let’s look at a couple examples to sort of explore what that actually means, where things have stayed the same even if some superficial changes have taken place. So, one of the big actors in development today is the Global Partnership for Education. It literally has partnership in its name. Can you tell us a little bit about, we call it, the GPE? What is the GPE? And how does it sort of operationalize the idea of partnerships?
Francine Menashy 15:21
Yeah, I mean, first of all, I wouldn’t call these changes so much “superficial” because I mean, the partnership mandate actually spurred the design of a new form of organization. And that’s pretty big. And they are called multi-stakeholder partnerships, or MSPs. And I should first explain that these multi-stakeholder partnerships are everywhere. They are not just in education, they’re in development more generally in all different sectors, and they’re these organizational manifestations of this partnership narrative. So, multi-stakeholder partnerships, they tackle single-issue areas like health or the environment or, as in the case of GPE, education. And they bring together stakeholders from the state and the non-state sectors from the global North and the global South into single decision-making forums where they can collaborate and coordinate policies on development funding, they pool aid. And GPE is a multi-stakeholder partnership dedicated to increasing quality education worldwide, and they support low-income countries. And GPE was initially launched in 2002 by the World Bank, and it was called the Education for All Fast Track Initiative. But it’s since been rebranded into GPE. It’s been GPE for quite some time, and it operationalizes this idea of partnerships through both its country operations and its governance. So, its governing body is rhetorically defined as an equal partnership. It is a constituency-based board. It consists of voting members that represent donor countries or bilateral aid agencies, recipient countries, multilateral agencies, civil society, from the North and the South, private sector foundations, and includes over 70 developing country partners -that’s what GPE terms them DCPs- that receive resources via this GPE Fund, which is this pooled fund, and it’s financed predominantly by high-income, Northern donor country partners or bilateral donors. And its first guiding principle in its charter is country ownership. So, it is an organization, it really attempting to embody this idea of recipient countries on equal footing with those in the global North.
Will Brehm 17:57
And has it lived up to such a value?
Francine Menashy 17:59
In my research -and this includes many interviews with stakeholders and analysis of many different kinds of documents- I studied GPE’s history of reforms, its governance dynamics, its country-level processes and I found that despite real efforts, like real explicit efforts, GPE tends to retain a power dynamic that’s akin to that of this traditional aid architecture in which actors who are situated in the global North wield the most influence and have the most dominant voices in decision making. So, just as an example, the World Bank, which initiated GPE back when it was the Fast Track Initiative, it acts as its host, the GPE offices are within World Bank headquarters, and it is GPE’s most common grant agent, which means it distributes funds at the country level. And according to many of my interview respondents, the World Bank is viewed as having just an outsized level of influence on the partnership. As well, representatives of high-income donor governments were widely viewed as having the most dominant voice and influence within GPE governance based on my interviews, and it’s no coincidence that they’re the ones that are financing GPE. So, in this case, resources, or money, equals influence in many ways. I also found that those who speak dominant languages, mainly English and French, also had more influence, which naturally exclude so many representatives from many countries in the global South. And I also saw that country-level operations, despite engaging local education groups and local actors, were, in fact, very donor and multilateral dominated as well. But I do want to add that GPE as an organization, its members, its Secretariat; they’ve made huge strides and numerous explicit efforts to ensure that its developing country partners have more voice and have more influence. They’ve started having these pre-board meetings for Southern constituencies; the Secretariat gives them a lot of support to engage. So, these are more recent efforts that I’m hopeful will make some difference, but at the time of my research, these North-South power asymmetries were pretty stark.
Will Brehm 20:38
It’s quite interesting, I mean, because you can, you know, design a whole organization to sort of embrace that 1990s idea of partnership and, you know, have constituencies on the board and have DCPs trying to be represented and try and have a bit more equality between the North and the South, so to speak and yet, you’re saying, we still see sort of power imbalances reemerging along very familiar lines -language, money, particular institutions that are powerful globally and have been for quite some time. And it just makes me wonder, you know, even if we had the best design structure, are we always going to be running into some of these larger problems? Like in other words, is it actually a function of the nation-state being sort of problematic and therefore having power imbalances among and between nations, and so creating structures that are multi-stakeholder partnerships where the nation-state is, you know, one of the main actors, that these problems that you’ve identified are sort of always going to emerge out of it?
Francine Menashy 22:01
That’s a great question. It is entirely possible, but my only hesitation with thinking that that’s at the root of the problem is because these multi-stakeholder partnerships are also highly inclusive of private sector actors and non-state-based actors, civil society actors. And what I also observed is that those power dynamics, the issue is not with the nation-states so much, the issue is with the global North and having money and being from high-income countries. That is where I see this issue hinging. Less so about the issue of the nation-state.
Will Brehm 22:48
Right. So, it could be more about, in a sense, global capitalism, and you know, big multinational organizations or companies finding new ways to extract profit. And for whatever reason, they’re deciding to get into these multi-stakeholder partnerships; they still have their bottom line as being the driving force.
Francine Menashy 23:09
Absolutely. Yeah. And that would be most notable when we are discussing the private sector. But I think this has much more to do with the capitalist and unequal -as a result of being capitalist- unequal economic structure of the world economy. It’s less about the nation-states and more about economic structures, in my view.
Will Brehm 23:37
Yeah. Right. It’s interesting because then it just makes me think, you know, how can you then create any organization and structure in, you know, these sort of idealistic, ethical, sort of you know, want to change power imbalances but if you don’t actually address some of these deeply unequal economic structures, we’re going to basically replicate the same power imbalances that we originally were trying to solve. I mean, it’s a bit, I don’t know, depressing.
Francine Menashy 24:07
It is! I mean, the economic system and our structures are so fundamentally flawed and so destined to rely on these power imbalances in some ways. It is depressing, but I’m hopeful for change.
Will Brehm 24:25
I mean, that is interesting as well. That the power imbalances are actually a needed feature in the system. And, you know, therefore, it’s almost impossible to overcome them. But I want to turn to maybe not as big of an organization as GPE, but a slightly different type of organization that also is thinking about partnerships in new ways. And I want to talk through that. And this is the organization called Education Cannot Wait or it is a fund, I think, and you sort of detail this in your book as well. Can you just give us an idea of, you know, what is Education Cannot Wait, and how does it sort of understand and operationalize the idea of partnerships?
Francine Menashy 25:09
Sure. So, Education Cannot Wait is a partnership with a mandate to fund education in emergency contexts, which are contexts that have been historically underfunded. And it’s fairly widely agreed now that the traditional aid mechanisms have not been adequate to address education in sudden emergencies and in contexts of fragility. So, Education Cannot Wait was envisioned as a faster, a more agile, a less bureaucratic organization that can respond rapidly to support education in contexts of crisis. So, it was largely spearheaded by Gordon Brown, who’s the UN Special Envoy for global education. ECW is governed by what’s called a high-level steering group, but it’s actually very much like the GPE board. It’s also constituency-based, and it operationalizes this idea of partnership, and in a similar way to GPE, through its decision-making process. It has governments of conflict-affected countries represented in this high-level steering group; it has representatives from the state and the non-state sector. And it also promotes in its policy discourse, and its organizational rhetoric, this idea of national ownership. And it promotes what it calls a localization agenda. And this means the participation of local communities, affected communities in its governance and in its country-level processes. And it’s only been around since 2016.
Will Brehm 26:57
Do you think it is, you know, living up to this idea of partnership by creating, you know, less Northern driven aid, more local participation, changing power imbalances, you know, how do you read what ECW has been doing for the last three or four years?
Francine Menashy 27:16
So, based on my research, including interviews that I’ve conducted, quite interestingly, because I conducted the ECW research after the GPE research, but many of the critiques of GPE were really paralleled in my findings. So, just as the World Bank hosts GPE, UNICEF hosts Education Cannot Wait. And respondents in interviews repeatedly identified UNICEF as holding an outside influence and being a real central player. As well, in its governing body, high-level actors and organizations from the global North hold the most vocal positions, while beneficiaries, including local governments, and communities that are affected by crisis -refugee communities, for instance- have participated in only a fairly limited way. And in its country level work, I was told that organizations and actors from the global North -including not only donors and multilateral agencies, but also international nongovernmental organizations, so the big global NGOs- really control the Education Cannot Wait fund implementation process, with very little input from local actors. So, I should add, though, as I mentioned, ECW is a very young partnership. It’s only been around for a few years, and all the people who I spoke, I was going to say most of the people, but all the people that I spoke with, recognize this as a problem, and they want to make changes. But as it stands, there are still these clear North-South power asymmetries with ECW.
Will Brehm 28:56
It’s interesting. So, I mean, this is sort of like organizational studies in a way, right? How do you have an organization where everyone potentially inside sees that this is a problem, and they want to make change, but then still cannot make change? Right? How is the organization somehow larger, and has a life of its own, that’s preventing all of these individuals who share the same idea from enacting the change they want to see?
Francine Menashy 29:21
You know, that’s such an interesting point, because I’ve actually been in search for a name for this phenomenon of an individual recognizing the problem and individuals within an organization, all of them recognizing that this is an issue, and not so much even the inability or the incapacity to change it but it’s almost as though the institution itself won’t permit the change. And so I’d be really curious if any of your listeners have a name for it in organizational theory perhaps, for this phenomenon, because I find it so fascinating, because I can safely say that I interviewed so many people from within these organizations that partner with them and believe in them and recognize this as a fundamental problem and yet, these power asymmetries continue.
Will Brehm 30:24
And, are private actors involved in ECW, like they are in the GPE?
Francine Menashy 30:29
They are. They’re involved in both of these multi-stakeholder partnerships. And by this, again, I am speaking mainly about companies and foundations, and in Education Cannot Wait rhetoric, they’re really strongly embraced. So, the Global Business Coalition for Education, for instance, has been involved, since the start. Actually, a core impetus behind the establishment of Education Cannot Wait was to engage the private sector and leverage private actors as what’s termed non-traditional funders to education in emergencies. So, they’ve been invited into the Education Cannot Wait fund and partnership largely because of their resources. In my analysis of the discourse around Education Cannot Wait, private actors are framed in a very aspirational and positive way. A lot of language around efficiency, technical expertise, having huge resources, advocacy power, they’re a new form of financing. So, it’s all very exciting, creativity, innovation. And I should add that a very similar discourse comes out of GPE, too. And this discourse, I think, drives perceptions of private actors as legitimate partners. And it leads to their authority in decision making spaces. So, private actors, including both foundations and companies, sit on the governing bodies and the decision-making spaces of both Education Cannot Wait and the Global Partnership, but what I actually found is that the private sector hasn’t made much of a financial commitment to either of these partnerships. But they have this key powerful role in governance. So, they have what’s termed, and this is a term I do know, “private authority,” which refers to the growing role of non-state based actors, most notably those affiliated with businesses in public policymaking spaces such as education. And I’d say that this role of private actors also perpetuates; it comes back to this North-South power hierarchy because the vast majority of private partners are situated in the global North, or headquartered in the global North, be it in California or New York, or London, or in other high-income countries and they’re primarily involved from my understanding because they have resources.
Will Brehm 33:09
But yet they’re not giving the resources is what you’re saying.
Francine Menashy 33:12
Will Brehm 33:13
Right. So, GPE is inviting them in, or ECW is inviting them in, giving them a spot on the board because they have resources and then the private actors in return don’t actually -they’re not contributing to the common pool of funds.
Francine Menashy 33:25
That’s right. Or to a very small degree. And the reason that I was giving and asking directly to these private actors, to foundations, to company representatives, was they don’t feel comfortable putting their funds into a pool of money where they can’t track it. They can’t follow the money; they can’t track their investments, which I mean, I guess it’s a fair statement to make. They want to know where their money is going and whether or not it’s having an impact, and that’s not something that’s possible when it’s pooled with other funds.
Will Brehm 34:02
So, I wonder why do they then even accept the board seat?
Francine Menashy 34:06
Well, I think they want to have a voice and have some type of power in decision making. They want to have an ear to the ground on what’s happening. It’s a question that I don’t really have a firm answer to. And I should say my answer was kind of skeptical because they also say because they care. Because they care about humanitarianism, they care about education in emergency context, they care about education in development, and they want to be there because they believe they have the expertise, they believe they have the technical know-how, that they can really give something to these partnerships above and beyond resources.
Will Brehm 34:52
It’s a very fascinating ethnographic insight into some of these boards that are made up of such different stakeholders and trying to understand why they might participate in such an endeavor. So, you know, in the end here, we have a situation where we have, you know, new aid architecture forming since the 1990s around the idea of partnerships and yet, you know, in the end, we’re still seeing a lot of these power imbalances continue, even though we have some new aid architecture. In your research, did you find any sort of examples or things that you can point to, to say, that’s a particular strategy that seems like it would be valuable to explore, to create a bit more power equality?
Francine Menashy 35:40
Yeah. I mean, despite all of these critiques of partnerships, I believe, and this is based on not just my own thinking but also the views of many of these interview respondents that I spoke with that multi-stakeholder partnerships are a move in the right direction, and they do have potential to shift power imbalances. But it’s a real challenge -what they’re up against. One way, I think, to make this shift happen is to be very intentional about eliciting active participation of stakeholders from the global South. And what I found is that partnerships have a tendency to elicit what I describe as symbolic participation, which is when actors are included physically in a space, and they’re touted by an organization as partners based on their seats at the table, but they wield very little influence, and they’re positioned as the least dominant voices in decision-making. So, one of the respondents in the study told me, and I always remember this quote, “the whole starting point needs to be different.” The starting point needs to be with the recipients of aid. The starting point can’t be with a bilateral donor, a multilateral organization; it can’t be with UNICEF or the World Bank. It can’t be with a company in Silicon Valley. It has to be with those who are receiving the aid. They’re the ones that need to get the ball rolling, make the decisions. And also, this idea of active participation, especially at the country levels, requires trust in local partners. Yet this trust appears to be quite rare. It requires that Northern actors relinquish control over development processes. And I found that bilateral donors, in particular, seemed very resistant to relinquishing control. But if I had that opportunity, I would be more explicit about the fact that power relates so strongly to privilege. And there is a lot of conversation around this notion of privilege, especially in the United States, where I work around, you know, white privilege and male privilege and the need to recognize it. So, I’d say that actors from the global North, who engage in these partnerships, they need to recognize their own economic, social, and more often than not racial privilege. It’s not discussed nearly enough, I think, in comparative education. But these hierarchies we’re talking about, they’re near always racialized. But more important than just recognizing privilege, it’s being willing to give that privilege up. To either use less of your own voice, to keep quiet, to defer to others, or to possibly step down and off of these policy bodies to make space for representatives from local communities or recipient countries. So, I think that would make real structural change and begin the process of shifting these power dynamics in international aid.
Will Brehm 39:01
Well, Francine Menashy, thank you so much for joining FreshEd again. It really was a pleasure of talking.
Francine Menashy 39:06
Human capital theory connects education to the labor market. It posits that more education makes workers more productive, which increases earnings. A more educated and productive workforce subsequently increases the gross domestic product of a nation. This theory has been prevalent since the 1950s and continues to play a central role in minds of both policy makers and parents. You go to school because you will get a better job in the future. The government invests in education because it will have a return on investment in larger GDPs.
My guest today says human capital theory is dead.
Hugh Lauder is Professor of Education and Political Economy at the University of Bath. He specialises in the relationship of education to the economy and has for over 10 years worked on national skill strategies and more recently on the global skill strategies of multinational companies.
Citation: Lauder, Hugh, interview with Will Brehm, FreshEd, 29, podcast audio, July 21, 2016. https://www.freshedpodcast.com/hughlauder/
Will Brehm 0:15
Hugh Lauder, welcome to FreshEd.
Hugh Lauder 0:24
Pleased to be here.
Will Brehm 1:08
Human capital theory is such a common place theory in many respects, because when people think about education, they think of it as for human capital development. What is human capital?
Hugh Lauder 1:54
Okay, so I need to take you back a little to the beginning of the theory. The theory was the first sophisticated account of the relationship between education and the economy, and it said that basically people who were better educated would be more productive. And in being more productive, they would then earn a higher income. So that brought education into the picture because what it required was for higher numbers of people to be educated in order they could become more productive so economies could grow, and their income would also accordingly grow. So that’s the basic idea behind it. And it’s an idea, of course, which has permeated through society. It first began really in Chicago in the 1950s at the university there in the Economics department. And then policymakers took it on board and policymakers thought, “Wow, we’ve got a win-win here. Because what’s happening is that if we increase the opportunities for education, so our economies will grow, so people will gain a greater income.” And at the same time, there’s a kind of connection with social justice. So that, for example, as long as people are prepared to work hard and are motivated in terms of education, then they will get their just rewards. And they’ll get their just rewards because employers will always choose the most talented; those that are likely to be most productive. So underlying what seems like an economic theory is actually also a theory of meritocracy. So that’s the economists, that’s the policymakers. And on top of that, of course, now we have parents and students who are going, “Okay, if I want a good job, then I’ve got to get a good education.” So that’s basically the idea behind human capital theory.
Will Brehm 4:01
And it’s led to some interesting notions in education like this rate of return. Can you talk a little bit about what this notion is?
Hugh Lauder 4:11
Yes, sure. So how do economists know, and policymakers know that this claim that education will lead to increased productivity, which will lead to increased income? Well, not how do they know it, but how do they make that assumption? They make that assumption by saying, “Let’s have a look at the rates of return for different kinds of education and skill in the economy.” And in the past – not now, but in the past – what they seem to have found is that the better educated you are, the greater your rate of return in terms of your income.
Will Brehm 4:52
So more schooling means higher income in the future.
Hugh Lauder 4:55
That was the idea, yes.
Will Brehm 4:58
So it’s like it’s predicting the future in many ways; that’s what they’re trying to do.
Hugh Lauder 5:02
For sure it is. Yes, they really thought that they had a theory which would actually explain and predict the future. And in fact, it has been a theory which has been around, as I said earlier, since the 1950s. And so in terms of social science theories, it’s one of the longest living. But it’s now coming to an end.
Will Brehm 5:27
Before we go into those critiques about the end of human capital theory, can you talk a little bit about what sort of impact it had since the 1950s on education, on education policy, on education development?
Hugh Lauder 5:44
I think the impact has come about in a number of ways. First of all, one of the immediate forms of impact was in development. So the World Bank took on the notion of human capital theory and has argued consistently, since the 80s, that human capital embodied in educated workers would raise the income of countries and of individuals in developing countries. So that was one clear example of the consequence of that particular theory. But, at the same time, it’s also been the case that in developed countries, it’s been seen that if you can increase your higher education system, then you’ll also get a win-win. You get the win-win because people will earn more money as workers and countries will have higher levels of gross domestic product. So these have been the two major consequences of the theory. But it’s also had an extra twist. And that was the notion of the knowledge economy. And the knowledge economy, which sort of started to develop as an idea in the late 80s, also seem to reinforce the idea that we now needed more educated workers. And the more educated workers there would be, so they would become more productive. And this was known as skill bias theory because at the heart of this form of human capital theory was the idea that technology would drive the demand for higher educated workers. So the skill would be biased in favor of the technology and the demand for higher skills.
Will Brehm 7:34
And it would be education that would provide those skills to operate that technology that is driving the economy?
Hugh Lauder 7:44
Precisely that. Yes. Now in more recent times, economists have become a little more sophisticated in one sense and they’ve started to look at particular kinds of skill for which there’s a higher return. But at the same time they’ve been kind of “atomizing” education into particular kinds of skill. So employers have gone in the other direction, and very often look at potential employees holistically. They want to know about their all-around capability in character, rather than also the specific skills.
Will Brehm 8:21
The work that I’ve done in in Cambodia, I’m just amazed by the prevalence of the idea of human capital being the main purpose of education. It is always meant to build and develop human capital because it will increase incomes, and also increase GDPs of the nation. And the conversations that we have are always about this idea of projecting into the future: what sort of economy Cambodia is going to have in 2030, for instance, and what skills are needed? And it just seems like it’s a fool’s errand of trying to predict the skills that are needed in the economy in 2030 for a country like Cambodia that’s rapidly changing; for a global economy that’s rapidly changing.
Hugh Lauder 9:14
Yes, I think this is a very good point. Let me just step back for a moment and say that in developing countries, there are certain sorts of skill that are clearly required for their development. And these forms of skill are to do with the state and state workers. They’re to do with various forms of craft work, so electricians, builders of various sorts, carpenters, that kind of thing. You need those kinds of skill. But the idea that you can predict in 2030 what’s going to happen is more problematic. And it’s more problematic, because just at the time when these developing countries are emerging into the global economy, so many of the techniques which are adopted in the global economy will hit them hard. So, for example, computer algorithms – what Phil Brown, my coauthor, and I have called “digital Taylorism” – that is moving up the skill chain very quickly, and robots. So, for example, if you look at China right now, there are less people in manufacturing in China now than there were in 2000. So in other words, many of the techniques which have been used in the knowledge economy – and actually it’s not the knowledge economy, its knowledge capitalism, because capitalism is always trying to reduce the cost of labor, including skilled labor – many of those techniques that have been developed in the developed countries are now being applied to developing countries. So that makes it kind of problematic as well.
Will Brehm 10:57
Let’s shift to your specific critiques of human capital theory. What do you find so problematic about the theory itself, maybe not the method that’s employed by the theory?
Hugh Lauder 11:11
Okay, let’s have a look at the theory itself. We start with education, and that’s meant to lead to greater productivity, which is then meant to lead to greater income for the individual and the GDP of the country. Well, when we look at that set of connections, we find that they are all problematic. They’re all problematic for this reason: That first of all, education. There’s now considerable split amongst economists as to what we mean by education. Is it something as I suggested earlier, which is a form of all-round development of an individual? Or is it about particular skills? And that debate has really not taken off yet, but it will. So the education itself in terms of human capital – ‘what is the capital’ is a problem. Then when you look at productivity, what we see overall is that there are more and more educated people in the world, more and more educated people in particular countries like the UK or USA, and yet productivity is either flatlining or is very uneven. So the link between education and productivity is now become wholly problematic. Then when you look at the relationship between productivity and income, it becomes even more problematic because what you see is that instead of workers getting rewarded for their productivity, since around 1978 to 1980 in the United States and the United Kingdom, what you see is that increasingly, the wealthy are creaming off the productivity of other workers. So there are problems with all these different accounts of the relationship between education, productivity and income.
Will Brehm 13:10
So this would be the Piketty’s argument of the rise of the 1%.
Hugh Lauder 13:16
The rise of the 1% certainly has been, in part, because they’ve creamed off the productivity of other workers, but we need to look more closely at the relationship between productivity and income than what Piketty was talking about. Because as far as I can see, and read him, he does assume that most of the rest of the income that people get is a reflection of their productivity. In other words, he becomes quite orthodox once he’s had to look at the 1% in terms of his account of wage determination, and I don’t think that’s right. You only have to look at feminist critiques of human capital theory – and I’m thinking in particular now of the work of Antonia Kupfer in Dresden – and you see that there are a whole range of jobs for which it’s very difficult to determine productivity. It’s not only super managers, as Piketty would say, but it’s care workers. How do we measure their productivity? Why is it that women who can be very skilled at care work get such low wages? There’s a whole range of different questions that can be asked about this relationship between productivity and income. And the idea that productivity simply determines income is taken as a truism in orthodox economics. But I don’t think we can take it as such anymore.
Will Brehm 14:48
So let’s turn to the way in which human capital theory has been studied empirically. What sort of critiques do you see in the way in which it’s been studied?
Hugh Lauder 14:59
Well the way it’s been studied empirically – I’ll give you a clear example since you raised the idea of 30 years as a future timeline for prediction. There’s work by two leading economists, Eric Hanushek and Ludger Woessmann, and Hanushek and Woessmann have published a series of papers for the World Bank, the OECD, where they look at the quality of PISA data (this is international test data for different countries). And on that basis, they then predict that in the future if countries can raise their education standards and their educational achievement so this will increase GDP in 20 or 30 years by X amount. And that has become kind of a standard way of analyzing the returns to education in terms of human capital theory. But I don’t need to tell you this, you will know it and so will all your listeners, that that kind of assumption simply doesn’t take into account the real world. We know, for example – and this is often an example I use – that when you compare Korea in the 1950s and Ireland in the 1950s, what you see as two countries with large numbers of relatively unemployed graduates. Both countries then began to take off, but if you look at the path of Korea where much of the takeoff was state led, and is still highly state influenced, what you see is a totally different kind of success story to the story of Ireland, which of course collapsed in 2008. So different trajectories for countries based on different ways of developing them produce different results. So what Hanushek and Woessmann don’t really do is take into account strategy, institutions, all the things that actually make a difference to whether countries and individuals in them do well or not.
Will Brehm 17:16
One of the critiques you you put forward is that human capital theory or the scholars who are using human capital theory often employ methodological individualism. And we hear this quite a bit also in other education research, and I just would like to ask, what does that actually mean?
Hugh Lauder 17:37
Sure. Basically, the assumption of methodological individualism (which is an ugly term, I know), the basic assumption is that the only thing that exists in society are individuals, and therefore it is to the individuals that we look to explain educational outcomes, to explain income, to explain the key features of social life and economic life.
Will Brehm 18:06
And so it neglects things like history, and perhaps the privilege that one could get from his or her parents rather than just their individual unique ability to learn.
Hugh Lauder 18:22
Yes, absolutely, that’s correct. So it neglects history. It neglects the structures which govern our societies such as class, patriarchy, racism. They don’t enter the story at all. And at the same time it neglects institutions, specifically institutions of education, for example; institutions that steer an economy. All that is simply discounted in this kind of explanation, which focuses on individuals.
Will Brehm 18:58
So if we were to talk about alternatives to human capital theory, how would you describe the link between education, productivity and income?
Hugh Lauder 19:08
Okay, well, first of all, these are now very, very complex connections. They’re not at all simple in the way that the original theory assumed. So we need to think about this very, very differently indeed. Let me just come back to the issue of structures and institutions. When you look at, for example, skill bias theory, it says that we understand that in the 20th century, technology was skill biased – that actually what happened was that as technology developed, so the demand for skills increased. But when you look at the history, it can be read completely differently. And it can be read like this, it can be read: Well, actually, the basis of 20th century industry was Fordism, the idea that people could put a nut on a bolt on a production line and out would roll many cars, many televisions. All the consumer goods that we now take for granted. These people were not up-skilled, they were de-skilled, because originally the people that made the cars were craftspeople. So that’s where you have what they call “skill replacing”, where the technology replaces the skill, doesn’t enhance or demand an increased skill. So then you say, “Well, where did the skill bias, the skill enhancement and demand for it, come from?” And actually, it came from the large numbers of white-collar workers you needed to run a large corporation like it. So these are the people that did the marketing, these are the people that did the accounts, these are the people that did all the other finance work and the planning.
But in order to understand how those corporations grew, you also then have to go to a much wider political economy. You have to go to a political economy which talks about the structures of the labor market – and here we’re looking at trade unions as well as employers. And back in the 50s, for example, and the 60s, trade unions were very strong, and they could increase their wages so that their workers could then buy the cars that were rolling off these production lines. Now, you’ll see for a moment there that the story I’m telling is a very much more complicated story than the one that skill bias theorists assume. Now, they assume that because in the past, we have had skill bias theories, so we will in the future. But the political economy around skill and skill development has now changed dramatically, and we need to understand it in terms of globalization, not in terms of Keynesianism and the idea that you could get some kind of agreement between trade unions, employers and the state, because now trade unions are much weaker, for example. They’ve been weakened through neoliberalism.
So you need to tell a completely different story. And you tell a story now about globalization and the demand for skilled workers can occur anywhere; it doesn’t have to be in any particular country. Multinational companies can simply say, “Okay, these skilled workers we want, they’re cheaper in Shanghai than they are in London. We’ll shift the demand to Shanghai.” So you can see that we’re living in a very, very different kind of world in which the sorts of prediction that human capital theorists made, or assumed they could make, simply no longer exist in that particular way. So we need a different kind of theory. But – and here’s the big but – the world we’re about to enter is going to be even more radically different from the one I’ve just described.
Will Brehm 23:16
Hugh Lauder 23:16
Well, robots. People make a lot of robots. And I used to be very skeptical about this. But I’ve just been talking to very senior infocom officials in multinational companies, and they tell me they’re scared of the consequences. And if they’re telling me that, then I’m really beginning to sit up and look at the other studies which suggests that robots can take many of the jobs that skilled workers used to take. We are moving, I think, into an era in which jobs and income will become increasingly uncertain for many, including many graduates. And that requires us to rethink the entire relationship between education and the labor market, because the labor market is so radically changing.
Will Brehm 24:12
Right. It’s fragmented and global, and you see further changes in the future.
Hugh Lauder 24:17
Absolutely. And they’re going to cause policymakers huge problems, which I think they’re reluctant to really start thinking about and confronting.
Will Brehm 24:28
Before we we turn to, “What then of education?”, you use this term, “the global auction for jobs”. Can you talk a little bit about that?
Hugh Lauder 24:38
Yes. So this is a book that Phil Brown, and I wrote with David Ashton back in 2011, which has kind of taken off a bit, and it’s taken off because up until then, the assumption was that technology would always lead to an increase in demand for skilled workers, and particularly for graduate workers. The research we did was on the skill strategies of multinational companies. And they told us a very, very different story. And I’ll give you an example of that, and it goes like this: The first interview that we did was with a human resources, very senior executive for a German engineering company in Germany. So the interview was in Germany; multinational company, though. And I said to him, because I have still had the human capital thinking cap on, as it were. I said to him, “Do you have a shortage of engineers?” And he said, “No”. And I said, “Do you get them from Germany?” And he goes, “No”. So I said, “Do you get them from England?” And he goes, “No”. And I said, “Do you get them from America?” And he said, “No”. Now you can see how my mindset was. I was thinking, Germany, Britain, America, right?
Will Brehm 25:58
Right, the place where engineers you thought were being produced.
Hugh Lauder 26:01
Exactly. And I said, frustrated, “Okay, where do you get them from?” He says, “We get them from China, we get them from India, we get them from Russia, especially if they’re computer engineers and mathematicians. And we get them from Bulgaria, because in the Soviet bloc, this was designated as the leading place for computer analysis and development.” And in that moment, our eyes opened to a whole new world that this guy in two sentences had given us. And that meant that we had to then get on airplanes, and go and interview executives of multinational companies from around the world to see what was going on. And two things were going on: First of all, because they are in such an intense competition, they’re always seeking to drive down costs, and brainpower they want to make as cheap as possible. So “cut price brainpower” we call it. Now you get that because you can get engineers, for example, in China and in India, for a fraction of the price you can get them in the West. So what you see then is the offshoring of jobs, or the movement of jobs, from particular countries like the United States and the United Kingdom to East Asia.
But at the same time, we picked up something else that was going on. And that was this notion of digital Taylorism, the idea that you can take skilled work that graduates used to do and you can break it down into discrete tasks, standardize it, routinize it and then put it into algorithms that you can ship across the world so that work can be done anywhere. So these are the two key features of the global auction. Now, there is one exception to this and that is at the same time as we’re producing all these graduates, highly skilled workers from around the world so then in comes a particular ideology which suggests that it’s only the very few of those graduates who are really talented. And so now on every bookshelf of every HR executive office that we went to, was this War for Talent book. And this is about how you recruit the most talented in competition with your other corporates. So this is the one exception: there are a few people who are now designated as talented. Now, there’s a major debate as to what’s really going on there and whether these people really are talented, or whether it’s just executives or corporations wanting to see a kind of great reflection of themselves in the younger new recruits coming into their company. Because, of course, these people designated as talented earn much more money than everyone else. So that’s the global auction in a nutshell. And that began to open up two debates related. The first was, “No, we don’t live in a knowledge economy. No, if you’re a graduate, you’re not going to enter a world where you’ll be highly rewarded necessarily, where you’ll have status, creativity and autonomy. Quite the opposite might happen, that you’ll be entering routinized work.” And alongside that, and following from that, is the idea that actually knowledge work itself is now being stratified. So that you’ll get an elite which is the talented, you might get another group beneath them that do their bidding, and then you’ll get these routinized workers. So that was why the book cause something of a stir, because we were arguing, for the first time I think, that the idea of the knowledge economy and of human capital and skill bias theory really didn’t work in the way that had been assumed.
Will Brehm 30:01
So what then of education? How do we make sense of education in this this world that you are painting for us here?
Hugh Lauder 30:09
Okay, this is, I think, a really important question. Because if you were to just think that we’re talking about today and tomorrow, then there could be a critique which comes in, especially from the right wing, which is: “Oh well, we’re just educating too many people to too high a level.” And in itself, that is problematic, because what else are graduates going to do when in countries like the United States and Britain, we no longer have the forms of industrialization where people could do high skilled, high paid work that, for example, still obtains in parts of Germany. So that’s one problem, but there’s a much bigger problem on the horizon. And I kind of signaled it when I talked about the robots. Because if so many of the skilled jobs that we have are going to be done by robots, then what’s going to happen to graduates? What’s going to happen to those who are educated? And I think the answer to that is something like this: We are going to have to give people a basic wage, a universal basic wage. Because the insecurities in the labor market will be so great that many will simply not survive unless they get a universal basic wage. Now, that universal basic wage will enable people to do a number of different things. It will enable them to retrain, to re-skill, for which they will need learning accounts so that they can draw on an account to upscale where they see a need. It will enable them to innovate and to develop different ways of interacting with this world. And the universal basic income will expand the labor market from beyond the confines of a market to work which is seen as important and contributing to society. And of course, care workers would be a clear example of that. So, that’s the labor market part of it in a nutshell. Then what about education? Well, if we’re thinking about that world, and you reflect on that for a moment, the uncertainties of that world, then clearly we need people to be as best educated as we possibly can make them. We need people who are reflective, alert, resilient in order to be able to make the best of the opportunities they have. So education becomes more important in these terms than in the past.
Will Brehm 32:41
Well Hugh Lauder, thank you very much for joining FreshEd.
Hugh Lauder 32:44
It was a delight. I hope it was of some value to you.