Thursday, April 26, 2007

Schools for the poor: Chance or Choice?

Touted as an unsinkable ship of social progress, public schooling in India has been showing dismal performance for several decades. In spite of steady increase in funding, government schools have shown stagnated or stunted growth.

Consider the following facts: In India 82% of children in rural area and 47% of urban areas attend public schools. At any given time one in four teachers are absent from work at government schools in India (world bank and KSG Harvard study). Even though the enrollment rate in primary schools has stood around 94%, more than 40% of these children drop out after primary school. What is alarming is that learning level among these children is far below the minimal standards. ASER 2005 study shows that more than 60% of the children in 7-14 age group cannot read a simple story at grade 2 level, leave alone basic math skills.

Inspite of the above grim picture, one might cite examples of some specially targeted school systems (like Kendriya Vidyalaya's) showing considerable achievements, but they come at the expense of enormous inputs over a relatively small set. Attempts to scale up small successes working within the public system has achieved only marginal successes. The situation contrasts with percapita expenditure of government on these children. City governments in India spend Rs 1,000-1,700 per child on education? Not every year.. but every MONTH!! [School Choice]. State wise, for example Karnataka spends about Rs600 per child, per month, which is more than the average cost of private schooling. Studies show that on an average, children in private schools perform far better than public schools.

Why is this so? Is there something inherently wrong with public schools? No one denies the primary role of government to ensure education as a public good to available to all children in the society. But, the government is only a tool for the purpose of education, it just happens to be a wrong tool [1]. Government is inherently inefficient in delivering public goods. Bureaucracy, Un-competitiveness, hierarchical structure etc, have made public school system one of the most corrupt public sector in India. If not for the public schools how do we ensure universal access and equitable quality in education? I believe that best solution is to fund students -not schools, through educational vouchers.

An education voucher is a coupon offered by the government entitling a student to take education at any school of his choice. It is a tool in the hands of a poor student to exercise the same choices in education, as are available to the richer students [2]. School vouchers improve quality through competitive market mechanism. Private parties set up schools in order to attract students. Market forces make them to use the available resources in the most efficient manner and provide better quality of education. Underperforming schools will eventually phase out since every student, irrespective of socio-economic background is now empowered to choose the school of his/her choice.
Thus money from the market follows the student and not the underperforming schools. Eventually even the government schools have to compete with private schools to attract students and thus enriching the quality. The innovativeness of voucher system is to empower the poor to be a consumer in education market. Markets delivers the best products (here education) at the most competitive price. Voucher system has dual advantages: the efficiency and accountability of private sector, along with equity and universal access of the public sector [See: CCS-concept note].

Not everyone accepts the choice based of funding. Voucher critics argue that school choice system leads to commercialization of education, eventually destroy the public education and thus defying the purpose of universal elementary education. These critics argue from the ideological position that education, being a public good, should be delivered only by government. Their belief that private sector with its profit motive cannot deliver the public goods is quite wrong. For example, environmental protection is a necessary public good, and one most effective used method to reduce carbon emission is 'carbon trading'- a system based on markets with government playing the only as regulator. To combat poverty, Mohammad Yunnis (last year noble laurete economics) pioneered micro credits for poor in Bangaldesh , again based on market principles.

Let us come out of arguments, be scientific and ask, are there any evidence that the voucher system has worked in reality? YES... Voucher programs have been implemented in different forms in countries as diverse as Sweden, Chile, Holland, USA, UK, New Zealand, Czech Republic and even Bangladesh [CCS]. There is sufficient evidence to show that in many of these countries Voucher system has led to increased performance of schools, better test scores and learning levels.

"It will not work in India- India is different!", critics say. They don't have a clear idea why it might not work, they just say India is different!. But, is there any data to show that it has not worked (I should remind them of Sherlock Holmes words, "It is fatal to hypothize before one has the necessary data.")? NO.. Where as, I believe that it will work better in India. In India, public sector has performed worse than most countries, where as private sector performance is comparable.

Setting aside one's beliefs, ideologies or prejudices, we should seriously look into whether Voucher system works in India. I hope, medium scale experiments (say at the district level) will be carried out to measure the feasibility and effectiveness of Voucher system. If it works, we have a good solution to the long standing problem of under-performing school system in India.

  1. School choices overview
  2. CCS India education choice campaign
  3. School choices India
  4. Kingdon, G. “The Quality and Efficiency of Public and Private Schools: A Case Study of Urban India”, Oxford Bulletin of Economics and Statistics, 58, No.1: 55-80, February 1996.
  5. Public and private schools in rural India, Karthik Muralidharan

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