Analyzing the External and Internal Efficiency Considerations in Public Subsidization of Education in Egypt

Abstract

The goal of public investment in education is to create the skills and attitudes needed for higher levels of productivity and growth. Whether or not such goals would be achieved will depend not only on the amount of resources invested, but also on the efficiency with which the inputs are managed. Hence, the issue is whether the Egyptian education system is efficient, in terms of achieving an optimal allocation of spending, and meeting the ultimate objectives of the educational process, or the government just throws money in an idle way. Accordingly, this paper spots the light on the efficiency of subsidizing the Egyptian education system through differentiating between the concepts of internal and external efficiency. The available data revealed the existence of both internal and external inefficiency of the Egyptian education sector, despite the investments devoting to it, reducing the dropout rate, achieving a considerable progress in getting kids into schools, and closing the gender gap over the past thirty five years. More efforts should be exerted; with greater investment in education, Egypt could take advantage of many more growth opportunities in high-skilled economic sectors, and develop the current generation’s entrepreneurial capacities and skills and capitalize on the existing potential.

Key words: External efficiency, Internal efficiency, Subsidizing the Egyptian education system.