The Political Economy of Educational Content and Development: Lessons from History

Beyond years of schooling, educational content can play an
important role in the process of economic development. Individuals�
choices of educational content are often shaped by the political
economy of government policies that determine the incentives to
acquire various skills. We first present a model in which
differences in human capital investments emerge as an equilibrium
outcome of private decisions and government policy choices. We then
illustrate these dynamics in two historical circumstances. In
medieval Europe, states and the Church found individuals trained in
Roman law valuable, and eventually supported productive investments
in this new form of human capital. In late 19th-century China,
elites were threatened by the introduction of Western science and
engineering and continued to select civil servants�who enjoyed
substantial rents�based on their knowledge of the Confucian
classics; as a result, investments in productive, modern human
capital were not made.