Dumb Money

Theil, Stefan, Newsweek International

Byline: Stefan Theil

Too many nations are wasting their school spending. Here's howto get it right.

"If we want to become a strong economy again, the best thing we can do is have an educated workforce." Few would object to U.S. Secretary of Education Arne Duncan's explanation of why Washington is funneling $100 billion to schools and universities as part of February's giant stimulus package. Indeed, other countries are following suit, with Britain, Germany, Canada, China, and others making new education funding part of their anticrisis strategies.

What's far less clear is that this money is going where it's most needed--or likely to have the greatest social and economic payoff. In Germany, the bulk of nearly [euro]10abillion in new school spending is being used to renovate buildings--a bonanza for construction companies and popular with parents and teachers, but unlikely to have much effect on the quality of German graduates. In Britain, Prime Minister Gordon Brown is pushing for more PCs and Web access in schools--another policy that's popular but considered irrelevant by educators. In the United States, a July audit by the Government Accountability Office found that schools were not using the stimulus money to boost student achievement, as promised by Duncan, but to fund their general budgets. And in still other countries, governments are using money to help build new world-class universities--projects that a World Bank study in July warned risk bleeding resources away from more desperately needed areas. "I'm not sure that the people making these decisions even realize the trade-offs involved," says Jamil Salmi, author of the study.

That's particularly unfortunate today, given the economic stakes. According to an April report by …

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Publication information: Article title: Dumb Money. Contributors: Theil, Stefan - Author. Magazine title: Newsweek International. Volume: 154. Issue: 07 Publication date: August 17, 2009. Page number: Not available. © 2009 Newsweek, Inc. All rights reserved. Any reuse, distribution or alteration without express written permission of Newsweek is prohibited. For permission: www.newsweek.com. COPYRIGHT 2009 Gale Group.

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