Indian Education System

It is widely accepted that India’s education system has and continues to fail the vast majority of its population. Ironically, the country’s success in establishing a globally competitive service sector has, if anything, underscored that failure. Poor quality, however, is not the only problem. The other is access - vast numbers of children simply do not enter the primary education system or leave it too early. Literacy and enrollment are particularly low among women and other marginalized groups. This failure is most glaring when comparing India with China where illiteracy, at least, has been substantially eradicated.

These problems persist despite several initiatives by the Central government to improve outcomes. Increasingly, therefore, liberal economists, international development agencies, and philanthropies have called for a shift towards greater privatization of primary and higher education. In particular, calls emerge to disconnect the funding of education from its operation, through the provision of education vouchers.

Privatization has worked well in several situations in India. Yet as the belief that it works everywhere gains greater currency, there is a need to evaluate if education is also amenable to privatization.

The Basic Argument

The idea of private education vouchers was first put forth by Prof. Edwin G. West. More recently, high profile organizations such as the World Bank and the Orient Global Foundation (with committed funding of US$100 million) have given the idea new impetus.

The theory is simple – deregulate education and allow private operation of schools, giving parents the option to choose where they wish to send children (so called “school choice”). The resulting competition amongst schools for these “consumers” would lead them to improve quality and expand access. The obvious challenge of including poor students is solved by providing poor parents with vouchers funded by the government.

Voucher systems have been tested in several countries - developing and developed - and arguments exist for and against. But few have tested the underlying assumptions of the theory of privatization.

Testing the Assumptions

The success of a largely private system depends fundamentally on two things – a financial incentive and the natural competition of free-markets. The assumption of competition in turn assumes three things: a) that “school choice” is real, b) that it is not possible to cheat the system, and c) that information flows are reliable enough to evaluate quality.

Do these assumptions hold?

The fallacy of school choice: In a private system quality improves through competition. Yet, experience shows that true competition is unlikely here. This is first, and foremost, a matter of supply and demand. Demand for education vastly outstrips supply in India and will do so for the foreseeable future. This remains true in the most affluent areas of Delhi, where it is common for parents to apply to several schools to secure admission for their children. Further, the cost of switching schools is high, marked by a social cost to the child of readjusting to a new environment and the administrative/financial cost to parents of the process. Finally, and as pointed out by Charles Wheelan, schools tend to restrict supply simply to maintain quality. Consumer power, then, is so limited as to make “school choice” more of an illusion even in the most “privatization friendly” situations. And if it doesn’t work here what hope do parents in small, remote, poor villages have where exclusion is largely social and thus not corrected by vouchers?

The problem of cheating: The second assumption is that faced with strong incentives schools will improve actual outcomes rather than cheat the system. It is illustrative, here, to note that in response to the No Child Left Behind act, publicschools in Chicago were found cheating on grades (they also underreported violence). That these were public schools is irrelevant – what is important is that faced with a top-down incentive to improve quality, schools preferred to cheat the system rather than make the necessary investments to improve actual quality.

Poor information for poorer consumers: This brings forth a final problem - that of evaluating quality. The education “market” is marked by poor information flows and by an inability of a large number of parents, who never went to school themselves, to evaluate objectively what a good school is. This again undermines the assumption that “school choice” exists. The truth is that we simply do not have a single definition of quality. Therefore, it is equally possible that schools that invest more in marketing and outreach - rather than in improving quality - will gain the most.

Unintended Consequences

There is one final test to which a private system must be put – even if private education were to improve quality, would it improve access and existing inequities in provision - or at least not make them worse? The two points cannot, of course, be delinked because any school’s outcome depends largely on the students it admits. Therefore, schools that receive students from academically poorer backgrounds must invest more to achieve the same outcomes. As Charles Wheelan said:

I expect that the Chicago Public Schools would be excellent if they had to accept only 1 of every 10 eligible students. (Indeed, the magnet schools in the system, which are allowed to select students competitively, are some of the best in the country.)

Second, education is often denied to children for a variety of causes and money or the absence of schools are only two of them. Others include the lack of roads, the lack of separate toilets for girls and boys (which prevents parents from sending girls), and the lack of “cultural capital” – such as supportive parents – which provides a select group of students with the skills to gain admission while depriving others of the same.

Can a largely private system ensure that schools help students overcome these barriers? Alternately, as education becomes a commodity, provided to the highest bidder, can its ill-effects be suppressed by ensuring necessary investments are made – such as arranging buses, building toilets, or helping disadvantaged students overcome their skills deficit through corrective courses? The obvious solution, of course, is oversight through regulation. Yet, to paraphrase economist Joan Robinson, “any State that has the capacity to prevent the ill-effects of the commoditization of education can also prevent the commoditization of education altogether; and any State that cannot prevent the commoditization of education lacks, ipso facto, the capacity to prevent its ill-effects.”

Is Privatization Necessary?

The preceding suggests that a private system is not a sufficient condition to better quality and access. Is it, however, a necessary condition? Or, is there another way of solving the problem through a public system?

There is no better argument that the same results are possible from a public system than China. As this comparison shows, China has done better than India both in providing quality and access to primary education, yet done so through a largely public system. Recent moves to privatize and deregulate education have been largely limited to higher education, with universities being encouraged to raise their own funds and endowments.

Clearly, then, privatization is not the only game in town. Nor is there any reason to believe that private schools are always preferred. For instance, a recent study in slums found that the vast majority of parents sent their children to “budget” private schools. This does not indicate a preference for private schools, but rather a lack of sufficient and good public schools. Moreover, very often in cases where both are present, private schools may be preferred not because of actual quality differences, but because of a social preference for private providers (seen as status symbols), or due to perceived rather than actual quality differences (bringing us back to the problem of defining quality).

Taking The Best of Privatization

It bears mentioning that despite its limitations, privatization does offer insight into the core problem – that public systems in India currently lack any compelling incentive to provide good education. The question should therefore be, how can incentives be built into public and private systems that ensure greater access and better quality without the negative consequences of a fully private system.

Clearly, this is possible. The American No Child Left Behind Act, despite its problems, is one example. In recent years, Delhi too has improved primary education, largely by providing the right carrots and sticks to schools and teachers. Finally, one must also consider that the majority of government schools in India are poorly funded and managed. Simple measures such as a better working environment for teachers and basic infrastructure that indicate respect for their work would go far to provide non-financial incentives for improving quality. Indeed, without such changes comparing public and private schools is comparing apples to oranges.

Conclusion

The argument for privatization is at once political and ideological. It is political because it reflects how societies feel about the role of the state in providing “public” services such as healthcare and education. It is ideological because proponents often supplement demands for privatization with terms such as “economic freedom” or “choice” to justify their preference. Yet, this last confuses means with ends. The existence of choice can hardly be viewed as an end in itself in this discussion. Not only does such terminology presume that choice is informed but it is relevant in this debate only if it improves actual educational outcomes, rather than the perceivedsatisfaction of parents.

It would appear that privatization is neither necessary nor sufficient for better quality and access to education. Nor is money the only or even best incentive available to improve either. Yet, the debate does offer valuable insights into why our system has not worked and how to fix it. The current system can, therefore, gain much through greater competition (possibly internal) and better incentives (possibly non-financial).

Finally, this debate must recognize that quality is interlinked with access and equity. The two require clear tradeoffs – high quality can generally only come by selecting the best and conversely by denying access to the most needy. Therefore, no debate on privatization can occur without debating the balance between quality and equity that India wishes to achieve. It is as much a debate on what India’s system should be like, as it is a debate on what our national priorities are to be –to be a thoroughbred meritocracy or to offer equality of opportunity to the majority of our people.