Friday, November 21, 2008

Markets for Education

For fairly obvious reasons, I'm interested in education. Working as a
middle school teacher tends to do that to you. And I'm interested in
the ways that education in the United States can work better. In
general (partly, at least, because of my own personal experiences), my
preferences run towards market incentives and away from government
regulation. In general, I would have to say that (central) government
regulation in education (read: No Child Left Behind) doesn't work very
well.

There needs to be accountability in education. Unfortunately,
standardized testing promotes the wrong kind of accountability. And
frankly, it's kind of bizarre that the party of small government has
implemented an old-fashioned approach to regulating education of a kind
that I would expect from New Deal Democrats.

On the other hand, calling the administration of G.W. Bush a "small
government" administration is clearly stretching the truth beyond any
plausibly recognizable form. Mmm.

But that's a tangent.

According to UNESCO (I should cite this, but I'm being lazy), the
Peruvian educational system is almost singularly inefficient in terms of
the kinds of student achievement it gets out of its kids, relative to
the amount of money it puts into the system. Lots of money in, almost
nothing out.

Not surprising on the ground. Peruvian teachers don't show up to work,
and when they do they're faced with terrible working conditions.

But you might expect that the private education system would (1) be
better, and (2) force the public institutions to compete, leading public
schools to perform better.

At least this is what the radical proponents of privatized education expect.

I'm not opposed to the introduction of some market incentives into the
school systems. I'm a big fan of merit pay and charter schools. But I
also think that the Peruvian case demonstrates that market forces
themselves cannot lead to the kinds of outcomes we want.

Why not? I'm not sure, but I've got a couple of ideas.
1. Geographic barriers to educational markets. In some places (like
rural Peru and islands in Maine) there simply isn't a big enough market
for private education.
2. Poverty. In some places (like Peru and Mississippi) people can't
afford a high-quality private education. This may be "efficient" in the
economic sense, but we probably aren't generally in favor of this kind
of efficiency. In general, we would probably feel a lot better about
ourselves if we provided rural Peruvians with (for example) a
sixth-grade education, and if we provided rural Mississippians with (for
example) a high quality high school education and subsidized student
loans, so they have an opportunity to be upwardly-mobile.
3. Collusion. Here, I'm talking about unions that are politically
powerful enough to resist market forces (and democratic pressures, among
other things). This might be a story about clientelist history, or it
might not.

I would like to test these ideas, but I'm not sure how I would get
around the endogeneity issue. There is a strong argument to be made for
the opposite relationship and the opposite direction of causality.
Countries with crappy public education systems will have lots of private
education (because who wants to send their kids to the terrible public
schools).

1 comment:

zane said...

There's an article in Foreign Affairs by Gurcharan Das (2006) called "The India Model" that does a great job dealing with these issues. In many parts of India people have developed all sorts of private systems that operate outside of the public provision of services, especially education. He argues that India's successes have largely been in spite of the state, rather than because of it.