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Periodical article Periodical article Leiden University catalogue Leiden University catalogue WorldCat catalogue WorldCat
Title:South African education: a principal-agent problem
Author:De Villiers, A.P.ISNI
Year:1999
Periodical:South African Journal of Economics
Volume:67
Issue:3
Pages:381-402
Language:English
Geographic term:South Africa
Subjects:cost-benefit analysis
education
External link:https://onlinelibrary.wiley.com/doi/10.1111/j.1813-6982.1999.tb01147.x/pdf
Abstract:In South Africa, with more than 20 percent of the budget being spent on education, it is of the utmost importance that the scarce resources be used optimally. One of the factors that contribute to the waste of money in the education system is the inefficiency of the present school system. This paper illustrates this inefficiency by examining the pass rates of pupils that entered the school system at the age of 6 or 7. Then it focuses on the principal-agent relationship, arguing that this is one of the possible causes of the failure of the system. In economic theory, a principal is a party that contractually engages an agent to assist in achieving certain goals, while the agent undertakes to act on behalf of the principal to reach these goals. In the South African education system the principal is not clearly identified. Nobody is being rewarded or held responsible for the efficiency, or the lack of it, of different activities. Possible solutions of the problem include a clear definition of who is the principal (the Minister of Education, the provincial Departments of Education, the teacher, the local community); the availability of more reliable data about the inputs and outputs of teachers; a better remuneration scheme; and more appropriate inservice training. Under the current conditions of imperfect information, uncertainty about the identity and goals of the principal, and a suboptimal remuneration scheme, it will be impossible to maximize the education system's output. Bibliogr., notes.
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