4.
Sustaining outcomes
Point (7) in its dynamic form frames the problem of sustainability when targets begin to be
achieved. Sustainability is a kind of path controllability: policy makers at a minimum want
the economy’s trajectory to preserve the values of objective variables once targets are hit.
But shifting policy levers requires resources; given the limited resource base of developing
countries much of this will be in the form of external inflows, whether overseas
development assistance or loans. What is the long term relationship between instruments
and outcomes and how stable are shifts in their values? If a certain value of an instrument—
partly achieved through an infusion of external funds—leads to the realisation of a target,
how permanent is this state and what is required to sustain it? Does the value of the
instrument need to be sustained to preserve achievement of the target? If so, for how long
will aid be needed to sustain the value of the instrument?
This is important for two reasons. Firstly, movement towards the MDG targets is supposed
to be equivalent to a shift towards a higher level of development. Historically, long term
development in successful countries has been propelled by a self-sustaining process of
internal transformation, even if external funds have acted as a catalyst or secondary engine.
Successful development involves countries becoming self-sufficient in the sense of not
requiring concessional aid to plug resource gaps. One would hope, therefore, that
achievement of the MDGs on the basis of certain kinds of relationships between instruments
and objectives is part of a self-sustaining development cycle and not merely the “artificial”
attainment of targets through large financial inflows divorced from underlying processes of
internal transformation. Secondly, there is a danger that once targets are achieved, donors’
attention may turn elsewhere in the belief that development problems are “solved”.
Sustainability may be hard to achieve (Kremer and Miguel (2004)); if aid is required after the
targets are met, then this needs to be made explicit.
Two of the MDGs relate to education and centre on rates of enrolment; they illustrate the
problem of sustainability. Enrolment rates are determined by supply and demand factors.
Supply relates to the number of schools and their distance from communities and is partly a
function of resources allocated to the educational sector. Demand for schooling is influenced
by the private rate of return to education determined by the difference in earnings of
workers with varying levels of education. Clearly, then, educational outcomes are a function
not just of provision, but also of the extent of income earning opportunities for skilled
workers generated by economic growth and a changing sectoral composition of output.
Studies have shown that the availability of schooling and state expenditure on education do
not very well explain enrolment rates (Bredie and Beeharry (1998); Lavy (1996)).
Much analysis of the MDGs’ educational targets focuses exclusively on the supply side and
on the amount of state resources that need to be spent calculated on the basis of an
educational unit cost and the number of students not enrolled (for an example see
Devarajan et. al. (2002)). Given the importance of demand-side factors in educational
outcomes, this bias raises questions regarding the sustainability of targets in the way that we
have defined it. In Indonesia, for example, enrolment rates were boosted during the 1970s
and 1980s by demand-side factors caused by fast economic growth, and by an expansion of
supply as a result of a large school-building programme. However, the economic crisis of the