Methodology The data Directory UMM :Data Elmu:jurnal:E:Economics of Education Review:Vol19.Issue3.Jun2000:
292 H.K. Siphambe Economics of Education Review 19 2000 291–300
to-date rates of return to education figures for Botswana.
2
The results from this paper are useful for three major purposes. Firstly, the results are useful as a guide to edu-
cation policy in Botswana, particularly relating to efficient allocation of scarce resources between the dif-
ferent levels of education, and how funding and access to different levels affect equity. Secondly, they contrib-
ute to the debate as to whether the pattern of rates of return to education provided by Psacharopoulos do hold
for Botswana given the current labour market conditions in Botswana. Lastly, they provide a test of the empirical
usefulness of the human capital model in the economy of Botswana.
Botswana has had impressive economic growth since gaining independence in 1966. Much of the success is
attributed to the exploitation of major diamond deposits discovered 1 year after independence. Nevertheless,
important aspects of Botswana’s political economy — including political pluralism and sound economic man-
agement — have been singled out as major factors con- tributing to this success story Harvey Lewis, 1990;
Colclough McCarthy, 1980.
Despite the country’s impressive performance in terms of both growth and increased expenditures on education
and other basic needs, the economy is challenged by a set of socio-economic problems. One of the major chal-
lenges to the economy is that there is unlikely to be a major growth in revenue in the future, yet there will be
need to finance the growing expenditures. In fact, for the first time in 16 years, the financial year 19992000 has
a deficit budget of P400 million, or 1.5 of GDP. How- ever, the deficit is not much of a problem yet as it can
be financed by drawing on government cash balances accumulated over the previous years Republic of Bots-
wana, 1999. What this implies is that government will, in future, need to curtail its expenditures, including
expenditures on education. For many years education has received a lion’s share of the budget.