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04/12/2020 - tp-b3950e88-7cf3-11ea-8f91-024 (temp temp) - World Economic Development
 Topic One
Overview of Difference in
Economic Development

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 CHAPTER ONE

Why Isn’t the Whole World Developed?

Richard A. Easterlin

T he worldwide spread of modern economic growth has depended chiefly on the diffusion
of a body of knowledge concerning new production techniques. The acquisition and
application of this knowledge by different countries has been governed largely by whether
their populations have acquired traits and motivations associated with formal schooling.
To judge from the historical experience of the world’s twenty-five largest nations, the
establishment and expansion of formal schooling has depended in large part on political
conditions and ideological influences. The limited spread of modern economic growth
before World War II has thus been due, at bottom, to important political and ideological
differences throughout the world that affected the timing of the establishment and expan-
sion of mass schooling. Since World War II there has been growing uniformity among the
nations of the world, modern education systems have been established almost everywhere,
and the spread of modern economic growth has noticeably accelerated.
With the coming of the modern age formal education assumed a significance far in
excess of anything that the world had yet seen. The school, which had been a minor
social agency in most of the societies of the past, directly affecting the lives of but a
small fraction of the population, expanded horizontally and vertically until it took
its place along with the state, the church, the family and property as one of society’s
most powerful institutions.
George S. Counts1

It is now a full two centuries since the coming of the modern technological age was sig-
nalled by James Watt’s invention of the single acting steam engine. In this period output
per capita and per unit of labor input have risen at long-term rates never before seen in
human history—first in northern and western Europe and Northern America, subsequently

1 Encyclopedia of the Social Sciences (New York, 1931), vol. V, p. 410.

Richard A. Easterlin, “Why Isn’t the Whole World Developed?” The Journal of Economic History, vol. 41, no. 1, pp. 1–19.
Copyright © 1981 by Cambridge University Press. Reprinted with permission.

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 4 | World Economic Development

in Japan, southern and eastern Europe, and parts of Latin America and Oceania.2 So great
is the contrast with prior experience that it has led Simon Kuznets to designate this period
as a new epoch in world history, the epoch of modern economic growth.3 Yet, after two
centuries, the great majority of the world’s population continues to live in conditions not
much different from those at the start of this epoch.
Given the startling contrasts in national experience, an objective look at the history of
the past two centuries would not, I think, place in the foreground the questions that now
dominate the study of economic history. The current preoccupation of Western scholars
with American and European—largely northwestern European—economic history can only
seem provincial, for the striking feature about these areas is the fundamental similarity
in their experience. Rather, the foremost question of modern economic history, the one
that challenges explanation, is why the spread of economic growth has been so limited:
why isn’t the whole world developed? Beyond this, there is the question of the future: will
the whole world become developed? If so, how soon? What is the outlook for the “epoch
of modern economic growth”?
No one can pretend to know the answers to these questions—but it is worth talking about
them, if only to build a case for redirection of research in economic history. Let us begin
with the question about the past: why has the spread of economic growth been so limited?

The heart of the whole process of industrialization and economic development is

intellectual: it consists in the acquisition and application of a corpus of knowledge
concerning technique, that is, ways of doing things.
David Landes4

In thinking about the past, let us imagine, to start with, a world not unlike that of the
late eighteenth century—a world of low and roughly equal levels of economic productivity
everywhere, and with fairly limited international contacts through trade, migration, and
investment. Suppose now that in one nation economic productivity starts rising rapidly and
steadily, because of an unprecedented rate of technological progress. Before long, a second
nation sets off on a similar course as technological change also accelerates dramatically, and,
then, a third. After a century or so, the total number of nations so embarked remains—on
a worldwide scale—small, though increasing.

2 Richard A. Easterlin, “Economic Growth: Overview,” International Encyclopedia of the Social Sciences
(New York, 1969), vol. IV, pp. 395–408.
3 Modern Economic Growth: Rate, Structure and Spread (New Haven, 1966), chap. 1.
4 “The Creation of Knowledge and Technique: Today’s Task and Yesterday’s Experience,” Daedalus, 109
(Winter 1980), 111.

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 Chapter One: Why Isn’t the Whole World Developed? | 5

Consider now a few implications of this development. In the course of time, large and
growing disparities would emerge between income levels in those nations enjoying the fruits
of rapid technological progress and those that are not. International trade and investment
would expand greatly as a result of sharp shifts in comparative advantage caused by dif-
ferential technological progress, and also because international transfer costs would fall
substantially if, as seems likely, those nations benefiting from new technology apply it to
problems of international as well as domestic transport. The resulting increased flow of
goods and resources internationally would have some beneficial effect on income levels
generally, but such effects would be relatively small compared with the dominating effect
on income levels of major differences in the rate of technological change.
This, I suggest, is the essence of what has occurred in the past two centuries.5 During this
period international income differences have grown at unprecedented rates, as have foreign
trade and investment. The prime mover in this drama has been the sharp acceleration in
the rate of technological change in a relatively small number of nations.
If this view is correct, then it follows that explaining why modern economic growth has
spread so slowly becomes a question of explaining why rapid technological change has been
limited to so few nations. To answer this, one must first consider whether rapid techno-
logical change, when it occurred, was based on a new technology in each country that was
indigenous or borrowed. On this, the view that a common technology diffused from one
country to the next is certainly the more realistic one. This is evidenced by the classic studies
of W. O. Henderson and David Landes of the spread of industrial technology in Europe; in
the accounts of the modernization of Japan by scholars such as Tuge and Saxonhouse; and
in Strassman’s studies of contemporary experience.6 It is evidenced as well by the striking
likeness of modern industrial technology among the various high productivity nations
themselves. Only in regard to agriculture, where local environmental conditions play an
important part in production, might one hesitate to stress the borrowed over indigenous
elements in modern technological change. But even in agriculture, one finds that many of
the principles of modern technology, such as irrigation, seed selection, livestock breeding,

5 For similar views see Kuznets, Growth; Rondo Cameron, “The Diffusion of Technology as a Problem in
Economic History,” Economic Geography, 51 (July 1975), 217–30; William N. Parker, “Economic Develop-
ment in Historical Perspective,” Economic Development and Cultural Change, 10 (Oct. 1961), 1–7; William
Woodruff, Impact of Western Man (New York, 1967); Paul Bairoch, The Economic Development of the Third
World since 1900 (Berkeley and Los Angeles, 1975); John Robert Hanson, Trade in Transition: Exports from
the Third World, 1840–1900 (New York, 1980); William Ashworth, A Short History of the International Econ-
omy, 1850–1950 (London, 1952). A valuable framework for the study of international political development is
presented in Stein Rokkan, “Dimensions of State Formation and Nation Building: A Paradigm for Research
on Variations within Europe,” in Charles Tilly, ed., The Formation of National States in Western Europe
(Princeton, 1975), pp. 562–600.
6 William O. Henderson, Britain and Industrial Europe, 3d ed. (Leicester, 1972); David S. Landes, The
Unbound Prometheus: Technological Change and Industrial Development in Western Europe from 1750 to the
Present (Cambridge, 1969); Hideomi Tuge, ed., Historical Development of Science and Technology in Japan
(Tokyo, 1961); Gary Saxonhouse, “A Tale of Japanese Technological Diffusion in the Meiji Period,” this
Journal, 34 (March 1974), 149–65; W. Paul Strassman, Risk and Technological Innovation (Ithaca, 1959).

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 6 | World Economic Development

fertilizer, and, more recently, development of hybrids and use of pesticides, exhibit quite
similar features among nations. Thus it seems reasonable to conclude that the question
of explaining differential technological change among nations in the modern period is a
matter chiefly of explaining the limited diffusion of a common technology.
Much of the research on technological diffusion has been admirably synthesized and
critiqued by Nathan Rosenberg.7 One strong impression that emerges from reading this
literature is the extent to which the transfer of technology is a person-to-person process.
As Rosenberg points out, “the notion of a production function as a ‘set of blueprints’
comes off very badly … if it is taken to mean a body of techniques which is available inde-
pendently of the human inputs who utilize it.”8 According to Svennilson, “much of the
detailed knowledge that is born in the course of industrial operations, can more easily and
in part exclusively be transferred by demonstration and training in actual operations.”9
Similarly, to Arrow, “it seems to be personal contact that is most relevant in leading to …
adoption [of an innovation].”10
This emphasis on the personal element in the transfer of technology suggests that under-
standing of it might usefully be approached by analogy with a situation in which most
of us here have some relevant experience, namely, as an educational process, in which a
new and difficult subject—“modern” technology—must be taught and learned. From this
point of view, explanation of the limited spread of modern economic growth turns into a
question of identifying the factors that have constrained the dissemination of a new type
of knowledge—that of modern technology.

II

Education produces large, pervasive, and enduring effects on knowledge and

receptivity to knowledge.
Herbert H. Hyman et al.11

7 Nathan Rosenberg, “Factors Affecting the Payoff to Technological Innovation,” unpublished document
prepared for the National Science Foundation (1974). See also David J. Teece, The Multinational Corporation
and the Resource Cost of International Technology Transfer (Cambridge, MA, 1976).
8 Nathan Rosenberg, “Economic Development and the Transfer of Technology: Some Historical Perspec-
tives,” Technology and Culture, 11 (Oct. 1970), 555, emphasis added.
9 Ingvar Svennilson, “Technical Assistance: The Transfer of Industrial Know-how to Non-Industrialized
Countries,” in Kenneth Berill, ed., Economic Development with Special Reference to East Asia (New York,
1964), p. 408, emphasis in original.
10 Kenneth J. Arrow, “Classification Notes on the Production and Transmission of Technological Knowl-
edge,” American Economic Review: Papers and Proceedings, 52 (May 1969), 33; see also Daniel Lloyd Spencer,
The Technological Gap in Perspective (New York, 1970).
11 Herbert H. Hyman, Charles R. Wright, and John Shelton Reed, The Enduring Effects of Education
(Chicago, 1975), p. 109.

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 Chapter One: Why Isn’t the Whole World Developed? | 7

Viewing the transfer of technology as an educational process leads naturally to questions

about teachers and students. If new technological knowledge spread slowly, did the fault
lie on the teachers’ side or the students’?
One reason for minimizing the teachers’ responsibility is that when entrepreneurs or
governments in low productivity nations wanted teachers, they seem to have been able to
beg, borrow, buy, or steal them, as well as send their nationals to the high productivity
nations for instruction. After the Meiji Restoration, for example, Japan imported numerous
foreign scholars and technological experts and sent students to the West.12
The more important question lies on the side of the students. What is it that makes for
effective learning? Learning is, as we all know, partly a matter of inherent intelligence;
partly of aptitudes; and partly of incentives. What we all seek are bright, well-trained, and
highly motivated students.
I think we can safely dismiss the view that the failure of modern technological knowledge
to spread rapidly was due to significant differences among nations in the native intelligence
of their populations. To my knowledge there are no studies that definitively establish dif-
ferences, say, in basic IQ among the peoples of the world.
A more persuasive case might be made with regard to incentives for learning; institu-
tional differences among countries undoubtedly created variations in the incentives for
mastering the new technology. In their studies of the historical development of property
and other institutions, Jonathan Hughes, Douglass North, Robert Thomas, and others are,
in this respect, filling an important gap in knowledge about incentive structures.13 But it
is important to recognize that the new technology itself created incentives for learning via
the competitive pressures exerted through international trade. Thus the rapid response by
producers in parts of Continental Europe and the United States to the British industrial
revolution was partly induced by the growing flood of imported British manufactures in
their markets. The new technology also created pressures for its more widespread adoption
by endowing its possessors with superior military capability. The threat to political sover-
eignty thus posed was a strong incentive for governments in low productivity countries to
initiate and promote programs of technological modernization, as in Japan. In the course
of time such economic and political pressures were felt in many nations throughout the
world; yet often the new technology failed to be taken up. The question is, why?
The answer, I suggest, has to do in important part with differences among countries
in the extent of their population’s formal schooling: the more schooling of appropriate
content that a nation’s population had, the easier it was to master the new technological
knowledge becoming available. Moreover, as I shall note subsequently, substantial increases
in formal schooling tend to be accompanied by significant improvement in the incentive

12 Tuge, Science; for early data on Japanese students studying abroad, see Reinhold Schairer, Die Studenten
im internationalen Kulturleben: Beitrage zur Frage des Studiums in fremdem Lande (Munster in Westfalen,
1927), chap. 1. See also Henderson, Europe.
13 Douglass C. North and Robert Paul Thomas, The Rise of the Western World: A New Economic History
(Cambridge, 1973); Jonathan R. T. Hughes, Social Control in the Colonial Economy (Charlottesville, 1976).

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 8 | World Economic Development

structure. Hence increased motivation often accompanied increased aptitudes for learning
the new technology.
The notion that learning potential depends on prior education should come as no sur-
prise here, for it is a guiding principle in most schools and colleges. Given intelligence and
motivation, one prefers students with better academic records from better schools, and with
more training in relevant subjects. If one’s concern is to explain why some nations were rapid
learners and others slow, it seems only reasonable to ask what sort of differences there were
in the educational systems that prepared their populations for acquiring new knowledge.
As a first step toward establishing the facts, Figure 1.1 presents historical data for
twenty-five of the largest countries of the world—in 1960 they accounted for over three-
fourths of the world’s population—on a very crude indicator of educational development,
the primary school enrollment rate. These countries, I believe, are reasonably illustrative
of experience more generally.14 The primary school enrollment rate at any date is simply
the number enrolled in primary school per 10,000 total population. It is subject to both
conceptual and measurement biases, most notably to variations in the proportion of school
age population to the total.15 It can, however, reasonably be taken as an index of differences
among nations and trends over time in their population’s exposure to formal schooling.
Roughly speaking, values less than 400 signify relatively little exposure of a nation’s pop-
ulation to formal schooling; values in the 400–800 range, a moderate exposure; and values
greater than 800, substantial. To facilitate comparisons among countries in the figure, the
section of each graph bracketed by an enrollment rate of zero to 400 in the period through
1940 has been shaded. Differences among countries in peak values and the trend in these
values are of little analytical significance because they reflect chiefly variations in the pro-
portion of school age population. For this reason, and to reduce confusion in the figure, a
country’s curve was not plotted after it reached a fairly high level.16
The first impression that emerges from the graph is the very limited extent of formal
schooling in most nations throughout most of the period covered in the graph. In 1850,
only a little more than a century ago, virtually the entire population of the world outside of

14 The countries chosen were those with 1960 populations greater than 18 million. Because of insufficient
historical data, Poland, Pakistan, and Viet Nam are omitted.
15 Among other comparability problems are the occasional use of attendance rather than enrollment data,
variations in the time of year for which enrollment is reported, differences in the length of the school day and
school year, and differences in schools included in the “primary” category (e.g., kindergartens).
16 For other studies of enrollment rates see UNESCO, World Survey of Education, vol. 2 (New York, 1958),
pp. 42–60; Alexander L. Peaslee, “Education’s Role in Development,” Economic Development and Cultural
Change, 17 (April 1969), 293–318. Although enrollment is used here in preference to literacy because it is a
more reliable indicator of the expansion of formal mass schooling, valuable work has been done to develop
historical literacy data. See Peter Flora, “Historical Processes of Social Mobilization: Urbanization and Liter-
acy, 1850–1965,” in Shmuel N. Eisenstadt and Stein Rokkan, eds., Building States and Nations, vol. I (Beverly
Hills, 1973), pp. 213–58; Carlo M. Cipolla, Literacy and Development in the West (Baltimore, 1969); UNESCO,
Progress of Literacy in Various Countries (Paris, 1953); UNESCO, World Illiteracy at Mid-Century (Paris,
1957); James F. Abel and Norman J. Bond, “Illiteracy in the Several Countries of the World,” Department of
the Interior Bureau of Education Bulletin No. 4 (1929), pp. 1–68.

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 Chapter One: Why Isn’t the Whole World Developed? | 9

northwestern Europe and Northern America had little or no exposure to formal schooling.
Even by 1940 this was still largely the case in Africa, most of Asia, and a substantial part
of Latin America.
Does the graph offer any support for the idea that spread of the technology of modern
economic growth depended on learning potentials and motivations that were linked to the
development of formal schooling? The answer, I believe, is generally yes. Within Europe
the most advanced nations educationally, those in northern and western Europe, were the
ones that developed first. Not until the end of the nineteenth century did most of southern
and eastern Europe start to approach educational levels comparable to the initial levels in
the north and west, and it was around this time that these nations began to develop. With
regard to the overseas descendants of Europe the picture is the same: the leader in school-
ing is the leader in development, the United States. Within Latin America, Argentina, the
most developed nation there today, took the lead in educational growth in the last half
of the nineteenth century. In Asia, Japan’s nineteenth-century educational attainment is
clearly distinctive, and this was true even before the Meiji Restoration, though important
reforms were introduced in 1872.17 In contrast, note the persistently low educational levels
until very recently in Turkey, a nation subject in many ways to external economic and
political pressures similar to those experienced by Japan, but failing until recently to show
substantial technological modernization.
There is, of course, the matter of cause and effect: are we looking here at the effect of
education on economic growth, or vice-versa? Is the growth of schooling merely induced by
the process of economic growth itself? In theory, economic growth is a cause of educational
growth, but it is only one factor and not clearly the dominant one. Some empirical evidence
suggesting that the growth of formal schooling often occurred largely independently of
economic development is offered by Figure 1.1 itself. Note that in the United States and
Germany development of widespread formal schooling clearly preceded the onset of modern
economic growth. Note, too, that for a number of countries the schooling curves show abrupt
upswings that are not matched by concurrent surges in economic development—examples
are Rumania between 1880 and 1910; the Philippines between 1900 and 1920; and Mexico
and Thailand between 1920 and 1940.
Even if one were to agree that in a general way theory and evidence are consistent with
the notion that formal schooling fosters attributes in a population that are conducive to
the acquisition of modern technology, there remain important questions about the type of
schooling and attributes. Is it true, for example, that “the spread of technological knowl-
edge, narrowly considered, is not a matter of mass education, but of the training of a small

17 Ronald P. Dore, Education in Tokugawa Japan (Berkeley and Los Angeles, 1965); Herbert Passin, Society
and Education in Japan (New York, 1965). A number of writers stress the role of education in Japanese economic
growth. See, for example, Kazushi Ohkawa and Henry Rosovsky, “A Century of Japanese Economic Growth,”
in William W. Lockwood, ed., The State and Economic Enterprise in Japan (Princeton, 1965), pp. 58–59, and
Yasukichi Yasuba, “Another Look at the Tokugawa Heritage with Special Reference to Social Conditions,”
unpublished paper, The Center for Southeast Asia Studies, Kyoto University, October 1979.

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 10 | World Economic Development

elite”?18 If mass education is important, does it have its effect via training in functional
skills such as “the three R’s,” through “screening,” or via political socialization, either of
a broad sort, or more narrowly, in instilling a discipline appropriate to factory work?19 Or
is the function of education, as some sociological studies suggest, one chiefly of creating a
basic change in human personality—a “modern man” who acquires aspirations and atti-
tudes especially favorable to the adoption of new technology?20 According to these studies
even a small amount of formal schooling has an effect of this sort, although the greater the
amount of schooling the greater the effect.21
The present state of knowledge does not, I think, provide satisfactory answers to what
types of education have what specific effects on economic growth, and clearly the answers
need not be mutually exclusive. It seems likely, however, that a substantial primary educa-
tion system is essential for sustained economic growth. The reason for this is clear if one
contrasts the process of achieving higher income levels with that of raising life expectancy.
Thanks to modern public health and medical technology, it has proven possible to improve
life expectancy markedly even among large populations through measures such as use of
pesticides, water purification, and establishment of sewage, systems that require knowl-
edge and action by only a relatively few technologists. In contrast, raising productivity
levels involves active participation in new production methods by large numbers of the

18 William N. Parker, “Perspective,” p. 1. For valuable discussions of some of the issues in this paragraph see
C. Arnold Anderson and Mary Jean Bowman, eds., Education and Economic Development (Chicago, 1965);
C. Arnold Anderson and Mary Jean Bowman, “Education and Economic Modernization in Historical Per-
spective” and Lawrence Stone, “Introduction,” both in Lawrence Stone, ed., Schooling and Society (Baltimore,
1976), pp. xi–xvii, 3–19; Mary Jean Bowman and C. Arnold Anderson, “Concerning the Role of Education
in Development,” and Martin Carnoy, “Education and Economic Development: The First Generation,” Eco-
nomic Development and Cultural Change: Essays in Honor of Bert F. Hoselitz, 25 (Supplement, 1977), 428–48;
Frederick Harbison and Charles A. Meyers, Education, Manpower, and Economic Growth (New York, 1964);
Cameron, “Diffusion”; The World Bank, World Development Report (Washington, D. C., 1980), chap. 5.
19 James S. Coleman, ed., Education and Political Development (Princeton, 1965); Samuel Bowles and
Herbert Gintis, Schooling in Capitalist America (New York, 1976); Martin Carnoy, Education as Cultural
Imperialism (New York, 1974); Robert Dreeben, On What Is Learned in School (Reading, MA, 1968); Philip
Foster, Education and Social Change in Ghana (Chicago, 1965); Harvey J. Graff, The Literacy Myth (New York,
1979); Michael B. Katz, Class, Bureaucracy, and Schools (New York, 1971).
20 Alex Inkeles and David H. Smith, Becoming Modern (Cambridge, 1974); Alex Inkeles, “The School as a
Context for Modernization,” International Journal of Comparative Sociology, 14, no. 3–4 (Sept.–Dec. 1973),
163–79; David C. McClelland, “Does Education Accelerate Economic Growth?” Economic Development and
Cultural Change, 14 (April 1966), 257–78; William Form, “Comparative Industrial Sociology and the Con-
vergence Hypothesis,” Annual Review of Sociology, 5 (1979), 1–25.
21 Inkeles and Smith, Becoming Modern, chap. 9. Formal education is, to be sure, not the only institution to
create modern men; some of the new economic institutions accompanying modern economic growth—most
notably, the factory—also work in this way. Thus, there is the possibility of growth “by pulling up on one’s own
bootstraps”—factories once established create personality changes conducive to further economic growth.
But the population exposed to factory experience is much more limited than that potentially reached by a
formal school system. Moreover, the evidence indicates that the impact of formal schooling in creating the
personality traits of “modern man” is much greater than that of any other institution—more than twice as
great, for example, as that of the next most important institution, the factory.

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 Chapter One: Why Isn’t the Whole World Developed? | 11

Rate
2000
USSR
UK
1600 Germany Sp Rumania
Gr
Fr
Italy
1200

UK Yugoslavia
800
France

400 Spain
Italy Yu
Ru
USSR
0
1820 1840 1860 1880 1900 1920 1940 1960
Rate
2000
Me Br Philippines
USA Japan
1600
Ar Thailand
USA
1200

800 Ja
Argentina
400 Mexico
Ph
Brazil Th
0
Indo
1200 Bu Korea
In
China
800

400
India Burma Ch
Indonesia Ko
0
Tu
Ir
1200
Eg
Nigeria
800

Ethiopia
400
Turkey
Egypt Iran
0
1840 1860 1880 1900 1920 1940 1960 1980 1880 1900 1920 1940 1960 1980

FIGURE 1.1 Primary School Enrollment Rate, By Country, 1830–1975 (per 10,000 population)
Source: Appendix Table 1.1.

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 12 | World Economic Development

population—by workers in agriculture, industry, transportation, and so on. This is not to

say that secondary and higher education can be ignored; clearly one needs technologists as
well as mass education. But increases at higher levels of education typically go together with
the expansion of primary education.22 On the other hand, education of the elite without
mass education is unlikely to foster economic growth.23
It also seems that the content of education conducive to economic growth is that of a
secular and rationalistic type. While such content has usually characterized an expansion
in mass education, this has not always been true. Among the countries in Figure 1.1, Spain
stands out as a country whose rate of educational development seemingly exceeded its eco-
nomic growth. A closer look at Spanish education, however, reveals that until the twentieth
century it remained closely controlled by the Roman Catholic Church: “the children of the
masses received only oral instruction in the Creed, the catechism, and a few simple manual
skills. … [S]cience, mathematics, political economy, and secular history were considered
too controversial for anyone but trained theologians.”24 One consequence of this is that
literacy in Spain fails to show an increase commensurate with what one might expect from
the data on primary school enrollment; even by 1900 almost two thirds of the population
remained illiterate.

III
It is necessary that we enter into a new phase of the Revolution which I shall call
the psychological revolutionary period; we must enter into and take possession of
the minds of children, the consciences of the young, because they do belong and
should belong to the Revolution. … It is absolutely necessary to drive the enemy
out of that entrenchment where the clergy has been, where the Conservatives have
been—I refer to Education.
Mexican General and ex-President Plutarco Calles, 193425
In simplest terms, the argument to this point is that the spread of the technology underly-
ing modern economic growth depended in large part on the extent to which the populations
in different countries had acquired appropriate traits and motivation through formal
schooling. But even if the plausibility of this view be tentatively granted, it only leads to

22 For example, for 90 countries in the period 1970–74, the adjusted R 2 between primary and secondary
enrollment rates is .51; between primary and higher, .41. Data are from UNESCO, Statistical Yearbook, 1976
(Paris, 1977).
23 In the nineteenth century, educational modernization in the Ottoman Empire, to the extent it occurred,
stressed education of the elite; see Andreas M. Kazamias, Education and the Quest for Modernity in Turkey
(Chicago, 1966). The 1950s data for India presented by Harbison and Meyers suggest a disproportion of
secondary and higher education relative to primary (Manpower, p. 47).
24 I. N. Thut and Don Adams, Educational Patterns in Contemporary Societies (New York, 1964), p. 62.
25 As quoted in J. Lloyd Mecham, Church and State in Latin America (Durham, NC, 1934), p. 406.

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 Chapter One: Why Isn’t the Whole World Developed? | 13

a more fundamental question: how can one explain the immense differences among the
countries of the world in the timing and growth of formal education?
If, to answer this question, one follows the approach of the new economic history, then
the appropriate guidelines are those currently offered by economic theory. This theory
centers on decision-making in one social institution, the family, and sees the expansion of
schooling as a voluntary response to growing payoffs to education generated by economic
growth. Government, if it comes into the picture at all, is seen largely as implementing or
ratifying private household decisions through public action.
There can be no question that serious research on economic incentives should form a
part of research into the causes of expansion of mass education.26 But the seemingly sizable
payoffs to child labor that prevailed in many developed countries in certain phases of their
modern economic history should caution against expecting too much from it. Research is
needed also on motives and decisions affecting education by social institutions other than
those relating to the family. Education is, as we are all aware, a powerful instrument for
influencing the minds of individuals in their formative years; indeed, if we did not believe
this, I doubt that most of us would be doing as professionals what we are now doing. This
elementary fact has hardly escaped the attention of those in society interested in obtaining
or maintaining political, social, and economic power.27 The result has been that the estab-
lishment and growth of mass education has often been the product chiefly not of market
forces but of political conflict in which major groups in a culture—groups that frequently
vary from one society to the next—are ranged against each other. At the risk of oversim-
plification, let me try to illustrate this point in terms of Figure 1.1.
The most obvious shift in political power with which growth of mass education has
been linked is the establishment of independence from a former colonial power. This is
suggested by the histories of a number of countries in southeastern Europe in the period
prior to World War I (exemplified in Figure 1.1 by Rumania and Yugoslavia), in the mid-
East in the 1920s and 30s (as illustrated by Egypt), and in Asia and Africa after World War
II (see India, Indonesia, Burma, and Nigeria).28 This observation implies that colonialism
was a major deterrent to the growth of mass education, and thus lends support to the
“imperialism” explanation for underdevelopment. Detailed empirical studies of colonial
policy such as that currently in progress for the United Kingdom by Lance E. Davis and
Robert Huttenback are needed to pursue this issue.29 But the data in Figure 1.1 suggest
reasons against a too hasty generalization of this sort. First, there are cases—though not

26 See, for example, David Mitch, “The Impact of a Growing Demand of Literate Workers on the Spread
of Literacy in Nineteenth Century England,” presented at the Workshop in Economic History, University of
Chicago, no. 7980–2 (Oct. 1979).
27 This has been explicitly recognized in recent economic history research. See, e.g., Alexander James
Field, “Economic and Demographic Determinants of Educational Commitment: Massachusetts, 1855,” this
Journal, 39 (June 1979), 439–57.
28 Flora notes the close association in a number of countries between the date of independence and the date
when compulsory education was established. See Flora, “Mobilization,” pp. 230–37.
29 Lance E. Davis and Robert A. Huttenback, “Public Expenditures and Private Profit: Budgetary Decisions
in the British Empire, 1860–1912,” American Economic Review, 67 (Feb. 1977), 282–88.

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 14 | World Economic Development

many—where colonial governments promoted mass education. The clearest illustration is

the American takeover of the Philippines from Spain; perhaps another example is Japanese
policy in Korea.30 Second, in Latin America decolonization in the nineteenth century was not
followed by a great upsurge in mass education; hence colonialism cannot be the scapegoat
there. Third, there is the counterfactual issue: in the absence of colonial rule would mass
education have been promoted vigorously by independent governments? It is noteworthy
that the historical record for Iran and Turkey in Figure 1.1 does not differ clearly from that
for Egypt; and that the same is true of the record for China compared with India, and of
Ethopia vis-à-vis Nigeria. Even a casual glance at historical experience makes clear the need
to consider other factors that have impeded mass education besides colonialism.
One factor that comes quickly to mind is absolute monarchy. The independent countries I
have just mentioned—Turkey, Iran, China, and Ethiopia—were all absolute monarchies, and
in none of these did a substantial trend toward mass education set in until after autocratic
rule was terminated. To judge from Figure 1.1 the same is true of Russia and Thailand.
Absolute monarchs seem usually to have regarded mass education as potentially subver-
sive of their power; in contrast, communist governments have vigorously promoted mass
education as an instrument of political socialization.31
Another deterrent to mass education appears to have been a situation in which the Roman
Catholic Church exercised substantial secular power. This has already been touched on in
the case of Spain; in Latin America, it is perhaps the dominant factor. The rapid rise in mass
education in Argentina after 1880 and in Mexico after 1920 both occurred in conjunction
with a substantial shift in power from church to state.32 In the Middle East, Islam frequently
appears to have been a negative influence in the development of formal schooling.33
For the countries where mass education was already fairly well established by the early
nineteenth century—represented in Figure 1.1 by Germany, England, France, and the United
States—sufficient data are not available for analyzing the historical patterns of growth. One
can ask, however, what set these countries apart from the rest of the world so early and
contributed to their relatively high levels of schooling? Three influences stand out in the
literature—Protestantism, humanism, and central government efforts at national integration.
One of the main tenets of early Protestant thought, as shaped by leaders like Calvin and

30 Carl H. Landé, “The Philippines,” in James S. Coleman, ed., Political Development, pp. 313–52; Shinkichi
EtŌ, “Asianism and the Duality of Japanese Colonialism, 1879–1945,” in L. Blussé, H. L. Wesseling, and G.
D. Winius, eds., History and Underdevelopment (Paris, 1980); Andrew J. Grajdanzev, Modern Korea (New
York, 1944).
31 On Russia and the USSR, see Nicholas Hans, History of Russian Educational Policy, 1701–1917 (New
York, 1964), p. 65, and Jeremy R. Azrael, “Soviet Union,” in Coleman, ed., Political Development, pp. 233–71.
32 Mecham, Church, pp. 245–47, 376–77, 388–93. In Brazil, however, the church does not seem to have
played as critical a role in the growth of mass education; there a shift in political control from conservatives
to liberals appears to have been more important. See E. Bradford Burns, A History of Brazil (New York, 1970),
pp. 290, 302–03.
33 On Turkey, see Kazamias, Turkey, pp. 73–74; Iran, Hafez Farman Farmayan, “The Forces of Modern-
ization in Nineteenth Century Iran: A Historical Survey,” in William R. Polk and Richard L. Chambers,
eds., Beginnings of Modernization in the Middle East (Chicago, 1968), p. 123. In Egypt, Islam seems to have
been less of an obstacle to educational change; see P. J. Vatikiotis, The Modern History of Egypt (New York,
1969), pp. 69–70.

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 Chapter One: Why Isn’t the Whole World Developed? | 15

Luther, was that “the eternal welfare of every individual depends upon the application of his
own reason to the revelation contained in the Scriptures”; in practice, this led to advocacy
of formal schooling in the vernacular language so that each individual would have personal
access to the Bible.34 Humanism, which reached fullest expression with the philosophers of
the eighteenth-century Enlightenment, preached the ultimate perfectibility of humanity
and thus also fostered a view favorable to mass education.35 Finally, some governments saw
in mass education a means of securing allegiance to the central government at the expense
of local authorities or the church.
The weight of these influences differed from country to country and not all operated in
each. The role of Protestantism was strongest in Germany and the United States, weaker
in England where the established Protestant religion was an Anglican version of Roman
Catholicism and the vigorous proponents of education were the non-conformists; and
weakest of all in France, which was predominantly Roman Catholic, although the separa-
tion of church and state was achieved fairly early. Humanism was strongest in France36 and
the United States, perhaps somewhat less so in England, and least influential in Germany.
Nationalism and national integration was a potent force in Germany and perhaps France,
but largely absent in England and the United States. Occasionally England’s laissez-faire
philosophy is used to explain its lag in educational growth relative to other countries in
northwestern Europe such as Germany, but the United States, which also lacked a national
education policy, clearly calls this view into question. The factor that sets the English off
most clearly from both Germany and the United States is the differential nature of Protes-
tantism—the much larger representation in the latter countries of what in England would
be called non-conformist religions, religions in the tradition of Calvin and Luther.37
Earlier, in touching on the question of incentives for learning, I suggested that the expan-
sion of formal schooling often signalled a positive shift in the incentive structure. The
reasoning underlying this should now be clear. A major commitment to mass education
is frequently symptomatic of a major shift in political power and associated ideology in
a direction conducive to greater upward mobility for a wider segment of the population.

34 Paul Monroe, A Text-Book in the History of Education (London, 1907), p. 407. Japan seems to have had
its own version of the “Protestant ethic”; see Robert N. Bellah, Tokugawa Religion (New York, 1957).
35 Carl L. Becker, The Heavenly City of the Eighteenth-Century Philosophers (New Haven, 1932).
36 Cf. Thut and Adams, Educational Patterns, p. 113: “In the end, Frenchmen committed themselves to the
ideas derived from humanism, rather than from Roman Catholic or Protestant theologies, a development
which had profound educational consequences.”
37 The leading role of non-conformists in the British industrial revolution is emphasized in Everett E. Hagen,
On the Theory of Social Change (Homewood, Ill., 1962), chap. 13. Valuable discussions of early American
education growth are Lawrence A. Cremin, American Education: The Colonial Experience, 1607–1783 (New
York, 1970); Bernard Bailyn, Education in the Forming of American Society (New York, 1960); Albert Fishlow,
“The American Common School Revival: Fact or Fancy?” in Henry Rosovsky, ed., Industrialization in Two
Systems: Essays in Honor of Alexander Gerschenkron (New York, 1966). On England, see Marius B. Jansen and
Lawrence Stone, “Education and Modernization in Japan and England,” Comparative Studies in Society and
History, 9 (Jan. 1967), 208–32; Stanley J. Curtis and M.E.A. Boultwood, An Introductory History of English
Education since 1800 (London, 1977); Roger S. Schofield, “Dimensions of Illiteracy, 1750–1850,” Explorations in
Economic History, 10 (Summer 1973), 437–54; E. G. West, “Literacy and the Industrial Revolution,” Economic
History Review, 2nd ser., 24 (Aug. 1978), 369–83.

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