In September 2015, the United Nations adopted an aggressive development agenda that included 17 separate Sustainable Development Goals (SDGs) designed to guide investment and development over the next 15 years. Two of these assume particular importance because they will determine whether or not the other 15 can be achieved.



Without economic growth that expands the size of the pie, there is little hope of reaching the desirable outcomes in terms of health, poverty, nutrition, and inclusion in improvements. And, without quality education, there is little hope of obtaining the requisite long run growth. The key, as research now indicates, is the amount of learning that goes on in schools, and this differs dramatically across countries.



Past efforts to expand education in developing countries have been less than completely successful, because they have put too much emphasis on access and time in school, and too little on the quality of any schooling. While there have been dramatic improvements in access to schools across developing regions, following the Millennium Development Goals, the story about learning of students is much less satisfactory. Developing countries continue to rank far behind the developed world in terms of measured cognitive skills, what we call the knowledge capital of nations.



Analysis that I have done with Ludger Woessmann (The Knowledge Capital of Nations: Education and the Economics of Growth) shows that almost all of the variation in economic growth rates across nations can be explained by differences in knowledge capital. Indeed, some of the puzzles of historic growth patterns no longer look like puzzles when we take into the learning that takes place in the different schools found around the world.



What is driving the East Asia miracle? On the whole, East Asian kids learn more each year they are in school that those in other places, producing a highly skilled labor force. Why has growth in Latin America been so slow? Latin American students get much less out of a year of school than elsewhere.



Once the knowledge capital of the countries (measured by international test scores) is considered, these regions fit in with growth patterns elsewhere in the world, as seen in Figure 1. This figure plots how long run growth rates in real GDP per capita from 1960-2000 relate to knowledge capital (after allowing for difference in initial income in 1960). The East Asian and Latin American countries are highlighted. Moreover, once knowledge capital is considered, pure access as measured by years of schooling completed bears no relationship with long run growth.



One thing that we have also learned in looking at economic growth, and that is implicitly shown in Figure 1, is that “quality education” is defined through world economic competition. While individual countries may have views on what constitutes quality, what counts for economic outcomes is the knowledge and skills of the population as proxied by consistent international test scores such as PISA or TIMSS.