Should qual­ity school­ing be for sale?

The Myanmar Times - - Views - AN­DRÉS VE­LASCO news­room@mm­

AROUND the world, pri­vate schools are boom­ing, es­pe­cially in de­vel­op­ing coun­tries. The Econ­o­mist re­ports that in 2010, there were an es­ti­mated 1 mil­lion pri­vate schools in the de­vel­op­ing world and the fig­ure has since risen quickly. From Latin Amer­ica to Africa and South­east Asia, pri­vate schools have been mov­ing into com­mu­ni­ties – mostly poor – where the state has been slow to pro­vide ser­vices.

This trend has proven con­tro­ver­sial. The mar­riage of ed­u­ca­tion and mar­kets at­tracts three main crit­i­cisms. The first fo­cuses on dis­tribu­tive jus­tice: If ev­ery­thing – in­clud­ing ed­u­ca­tion – is for sale, those who have more money will buy more of it. In­equal­ity in knowl­edge, and there­fore in­come, in one gen­er­a­tion will be trans­mit­ted to the next, per­haps in am­pli­fied form.

This is an im­por­tant con­cern, es­pe­cially given the in­creas­ingly skewed in­come dis­tri­bu­tion in de­vel­oped coun­tries. But econ­o­mists have long un­der­stood that the dis­tri­bu­tion of wealth, as John Stu­art Mill put it in his Prin­ci­ples of Po­lit­i­cal Econ­omy, is “a mat­ter of hu­man in­sti­tu­tion solely”. In other words, mar­ket-based pro­duc­tion is one thing; dis­tri­bu­tion is quite an­other, and it can be in­flu­enced by pol­icy.

Vouch­ers are one ex­am­ple. Pupils re­ceiv­ing a voucher, such as those used in Swe­den or Chile, can ob­tain as much ed­u­ca­tion as the voucher – not their fam­ily’s in­come – will al­low. There are valid crit­i­cisms of such schemes, in­clud­ing, as in Chile, that the vouch­ers may be too small to pur­chase a qual­ity ed­u­ca­tion; but, at least in prin­ci­ple, vouch­ers and other forms of fi­nan­cial aid can make a pri­vate ed­u­ca­tion, if de­sired, ac­ces­si­ble to all.

A sec­ond crit­i­cism is that ed­u­ca­tion mar­kets per­form poorly. We know from re­search in the eco­nom­ics of im­per­fect in­for­ma­tion that mar­kets run into trou­ble when what is bought and sold can­not be ob­served or mea­sured. Ed­u­ca­tion would seem to be rife with such prob­lems.

Pupils, es­pe­cially young ones, can­not ob­serve a teacher’s ped­a­gog­i­cal ef­fort. Par­ents, es­pe­cially if short on ed­u­ca­tion them­selves, can­not eas­ily eval­u­ate the qual­ity of their chil­dren’s school­ing. So for-profit schools may de­liver low teacher ef­fort and in­suf­fi­cient qual­ity.

Much re­search has gone into mea­sur­ing how se­ri­ous th­ese prob­lems are in prac­tice, and there­fore whether pri­vate schools per­form bet­ter or worse than pub­lic schools. There are abun­dant ex­am­ples, in rich and poor coun­tries alike, of fly-by-night for-profit schools that dupe par­ents and ne­glect stu­dents – Don­ald Trump’s sham Trump Univer­sity be­ing a case in point. But such re­search is in­con­clu­sive for sev­eral rea­sons, not least that pub­lic schools face in­cen­tive prob­lems of their own, lead­ing to low ef­fort, ab­sen­teeism and fre­quent strikes.

More­over, it is dif­fi­cult to sep­a­rate sta­tis­ti­cally the ed­u­ca­tional value added by the school from the char­ac­ter­is­tics of the fam­i­lies whose chil­dren at­tend. If mo­ti­vated fam­i­lies choose pri­vate schools, for ex­am­ple, their kids will per­form bet­ter, but not for any rea­son hav­ing to do with pri­vate school­ing.

The third crit­i­cism is that ed­u­ca­tion can be de­graded by be­ing sold and bought. Har­vard’s Michael San­del has ar­gued that there should be lim­its to mar­kets, and that there are things that money can­not – or should not – be al­lowed to buy.

We all in­tu­itively know, for ex­am­ple, that hir­ing some­one to act like a friend is not the same as hav­ing a friend. Be­cause of the in­her­ent dig­nity of hu­man be­ings, mod­ern so­ci­eties do not al­low peo­ple to sell them­selves, or their chil­dren, into slav­ery. And democ­ra­cies do not al­low ci­ti­zens to sell their votes, be­cause that would de­base elec­tions.

Is ed­u­ca­tion in the same cat­e­gory? Pro­fes­sors would like to think that we do our job be­cause of our love of learn­ing and teach­ing, and that our ef­fort and ded­i­ca­tion is not some­thing money can eas­ily buy. Crit­ics claim that the com­mod­i­fi­ca­tion of ed­u­ca­tion some­how de­grades it.

Par­ents in poor coun­tries, who have been flock­ing to pri­vate schools, may beg to dif­fer. In Chile to­day, 53 per­cent of all chil­dren at­tend voucher-fi­nanced pri­vate schools – many of them un­til re­cently run for profit – de­spite the top-up fees they of­ten charge. Par­ents are will­ing to make the ex­tra ef­fort sim­ply be­cause the lo­cal pub­lic schools are not good enough.

Nor is it ob­vi­ous that ed­u­ca­tion is so dif­fer­ent from health­care, an­other es­sen­tial ser­vice where is­sues of dig­nity and re­spect loom large. Pri­vate, some­times for-profit, clin­ics are com­mon world­wide, yet do not con­front the op­po­si­tion that for-profit schools elicit. Con­di­tional cash trans­fers are also widely ac­cepted in poor coun­tries, and de facto they in­volve pay­ing mothers to do such things as send their chil­dren to school or take them to clin­ics to be vac­ci­nated.

A more damn­ing charge is that mar­ket in­cen­tives change be­hav­iour in so­cially dam­ag­ing ways. Mr San­del men­tions the much-cited study of Is­raeli day­care cen­tres where par­ents, once they faced fines for late pick-ups, be­gan show­ing up even later to fetch their kids. The ap­par­ent ex­pla­na­tion is that par­ents treated the fines as fees and did not feel guilty about pay­ing them.

But mar­ket in­cen­tives may also have the op­po­site ef­fect, im­prov­ing mo­ti­va­tion or other valu­able traits. A 2012 paper ex­am­ined what hap­pens when stu­dents are al­lowed to choose (pre­sum­ably bet­ter) schools after win­ning a lottery. It finds that tru­ancy rates go down as soon as stu­dents learn about the lottery out­come; and once they move to the new school, their test scores rise sig­nif­i­cantly.

Con­trary to what zealots in ei­ther camp claim, nei­ther pub­lic nor pri­vate schools per­form bet­ter than the al­ter­na­tive at all times. So it makes sense to con­sider how to com­bine the virtues of both sys­tems, in­stead of sim­ply choos­ing be­tween them.

In the area of col­lege ed­u­ca­tion, a re­cent paper by Har­vard’s David Dem­ing, Clau­dia Goldin and Lawrence Katz con­cludes that in the US “for-prof­its ap­pear to be at their best with well-de­fined pro­grams of short du­ra­tion that pre­pare stu­dents for a spe­cific oc­cu­pa­tion”. In other ar­eas, tra­di­tional not-for-profit col­leges per­form bet­ter, with higher com­ple­tion rates and su­pe­rior labour-mar­ket out­comes.

Fi­nally, de­spite le­git­i­mate con­cerns about “teach­ing to the test”, there is ev­i­dence that prop­erly de­signed teacher eval­u­a­tions can im­prove in­cen­tives and per­for­mance in pub­lic and pri­vate schools alike.

More broadly, re­cent re­search makes clear that many fac­tors af­fect­ing ed­u­ca­tion out­comes have noth­ing to do with whether schools are pub­lic or pri­vate. A re­cent World Bank re­port calls on coun­tries to leave be­hind the “great school­ing wars” and adopt a “prag­matic ap­proach” to ed­u­ca­tion re­form. That seems like an ap­proach worth try­ing. – Project Syn­di­cate

An­drés Ve­lasco, a for­mer pres­i­den­tial can­di­date and fi­nance min­is­ter of Chile, is a pro­fes­sor at Columbia Univer­sity’s School of In­ter­na­tional and Pub­lic Af­fairs.

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