In modern days governments play a vital role in the development of education in the country. They have understood the importance of active participation in education to help their citizens boost their skills and knowledge in this competitive and challenging world. The important fact they keep in mind is that human capital development is the tool which has the highest fiscal rate. This means that educating people does not only develop skills, abilities, attitude and knowledge of people, but has a great influence on the development of all the other capital or resources in the country. All the other capitals, like physical, financial and natural, do not directly boost or help to boost the development of other capitals, even though there is a strong relationship between them. One can argue that more financial and natural resources create a higher possibility of increasing the physical and financial resources, respectively. However, the fact is that the success and failure of these possibilities depend on the strength of the countries human capital: the capabilities of people can only change such resources into the other. Therefore, governments are giving lots of attention to the development of its human capital through proper and valid education, which tallies with their development goals. Similarly people are desperately looking forward and urging for quality and trustworthy education.


There can be several reasons why governments need to directly involve in providing education than solely privatising it. Belfield (2000) has identified ten reasons, why governments need to provide educations. These reasons are broadly classified into two categories – four reasons related to demand and six related to supply of education.


When demand of education is considered he (Belfield, 2000) states that, firstly, children and other people might not be able to judge the need for education. They would not bother to demand for education. This happens because they are uncertain and ignorant about their status and demand for education. People will be comfortable with how they are and what they know, as in addition to being ignorant they do not want to leave their zone of comfort and try what is doubtful. Thus, “government may embody past wisdoms about the benefits of education” and reduce the “uncertainty and ignorance”. Secondly, people might not be able to identify the importance and quality of education. In such circumstances they would not be able to understand worthiness of investing money and time on it. Hence, governments are the only body which can “write and enforce these incomplete contracts”, which will help them realise its necessity. Similarly and thirdly governments “may underwrite outcomes” as demand for education is different from other resources. Other resources are produced for a particular purpose and the demand is limited, but education can be used at used at any level and will never go as a waste. Lastly, people might not be able to seek the necessary financial assistance as it is difficult to convince the lenders of the benefits of education. This degree of problems caused to different people in this circumstance will vary depending on the quality of individual persuasion, causing individual biasness. Thus, government can “offer loans … on socially distributive terms” to assist all the people to go for education.


In the context of supply, “governments can offer education more efficiently than private sectors.” (Ibid)  Firstly, it is worthless sending money and time for education if people cannot find jobs which are relevant to the field of study. Thus, government can be able to minimise this by providing services which can easily go along with the courses provided. Secondly, in all circumstances governments’ services are more trusted than other providers. Similarly in the case of education governments’ credibility and reputation are higher than that of its private counterparts. Thirdly, governments can maintain a systematic flow of providing education, unlike private providers. The curriculum and syllabus in the private institutes may not be the same making it difficult to the people to find relevant jobs. Governments use a common curriculum which does not change in overnights, making “it easier for screening”. Fourthly, unlike private providers, governments can be efficient in changing their system to cater for the needs of the society. Governments do not necessarily try to influence students, but leave room them to bargain, which makes the market stronger than private. Fifthly, increase of goods in the other markets will have a great influence on markets like education. However, it is not easy to increase the “efficiency” of the labour of education in such circumstances. Thus, governments …. may enforce an intergenerationally equitable contract of education provision against an increasing relative resource burden.” Finally, there is no basis for individuals to make education compulsory for others, but government can through supporting education acts.


Therefore, it is proven that government are the most credible source for providing education in a country. Governments’ reliability and credibility cannot be beaten by any other organizations or sources. In addition it is the only source which can provide incentives or force for education. It is an intangible and inconvincible tool for sustainable and long-term development, but has a high fiscal rate.