most sophisticated analysis available (Kakwani, Makonnen and van der Gaag, 1990) associates adjustment lending with doclining trends in public education financing and gross primary enrollment rates. Lower public education expenditures may result in lower quality and quantity of education services, fewer amenities (school lunches), or higher user fees. Furthermore, any change in civil service wages or employment has particularly strong effects on the labor-intensive education sector. Lower wages may reduce the short-term efforts of teachers, if not cause an exodus of experienced teachers (UNDP, 1989). Even if adjustment policies do not cause deteriorations in soJal conditions directly, they are criticized for not reversing declining trends.

1.12 On the other hand, Kakwani, et.al. (1990) suggest that the need to cut expenditures provides an opportunity to increase efficiency and equity i.a the use of resources. Serageldin (1989) notes that the Bank increasingly supports specific measures to protect vulnerable groups, for example by shielding public expenditures on key education and basic welfare services, by reviewing the composition of education expenditures and reorienting government spending in the sector, and through compensatory actions and transitional arrangements. Berg (1989) emphasizes that measures to reduce secondary and higher education's budget share; over time release resources that can be reallocated to primary education. Costs can be reduced by improving the efficiency ane cost-effectiveness of all public expenditures. The Bank hopes that by giving the social impacts of adjustment programs earlier and more serious attention, the adverse impacts of adjustment can be reduced (Ribe, et.al., 1990). For example, education expenditures can target those most in need, while the burden is placed on the relatively wealthy who have access to private education facilities and are able to pay higher fees (Demery and Addison, 1987). The need to restructure the public budget under adjustment is an opportunity for governments to evaluate social programs. If these measures are effective, the quantity and quality of educLtion services could improve during the adjustment period, even when sector resources decline. Guaranteeing access to education services protects the human capital of the poor, but will often require additional public resources. The Bank (1989e) explicitly recommends that governments in Africa commit additional resources to the social sectors, with an overall objective of 8-10 percent of GDP to be spent on human resource development.

1.13 Education Demand: The major demand effect is likely to be short-term reductions in income that lower demand for schooling. Declining household incomes, higher unemployment levels, and changes in relative prices raise the opportunity cost of time spent in school, relative to time spent in economic or household activities. Demand for education also decline if poor health and nutrition reduce attendance and the capacity to gain from education. Finally, demand responds to changes in supply such as lower quality and higher user fees.

1.14 Demand effects of adjustment policies are also positive. If children have less attractive labor market options, the opportunity cost of attending school declines. Demand also increases in response to more attractive labor market options: adjustment in the long term increases the expected private rate of return to education in response to expected improvements in the long-term prospects of the economy if the adjustment program is successful (UNDP, 1989). Overall impacts on demand vary by level of education because of differences in social and private rates of return to education investment. The social rate

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