Is the value of private schools over-stated or under-stated?

Two recent studies have contradictory findings on the 'value of private schools'.

Analyzing PISA 2011 test scores of 40 countries, Sakellariou of NTU finds that
students of private schools perform better in international assessments compared to students in the public school system. However, when one controls for observable socioeconomic background characteristics at the individual and school level, public school students perform equally well. 
India didn't participate in PISA 2011 but this finding is inline with the at least two other studies in Indian context, finding the same.

Jishnu Das, on the other hand, has a new paper on 'value of private schools', in the context of Punjab, Pakistan. The 'value of private schools' here is the willingness of parents to pay for private school. Das et. al find that 
central determinants of school choice are the distance to school, school fees, and the characteristics of peers. Families are willing to pay on average between 75% and 115% of the average annual private school fee for a 500 meter reduction in distance. In contrast, price elasticities are low: -0.5 for girls and -0.2 for boys. Both distance and price elasticities are consistent with other estimates in the literature, but at odds with a belief among policy makers that school fees deter enrollment and participation in private schooling. 
A voucher policy that reduces the fees of private schools to $0 (from an average annual fee of $13) increases private school enrollment by 7.5 percentage points for girls and 4.2 percentage points for boys.
Essentially, it means that parents desire to put their kids in private schools is more that we we typically tend to think. 

It is also important to note that quality or learning outcomes isn't one of the key determinants of parents in choosing the school, as described above. May be the characteristics of peers is being used as a proxy for the same.

In a different story, Project Syndicate reports that private tutoring has become the de-facto education system in Egypt due to governance failure in public schools. It's not uncommon in such situations for teachers to exploit the grey areas of conflict of interest.
“Things are actually worse since the revolution,” Khalil said while hopping on a minibus to a nearby wealthy residential compound where he gardens. He’s trying to make enough money to hire a private tutor for the exam. Indeed, private tutoring has become the de facto Egyptian education system.
Some teachers have admitted off the record that they teach the bare minimum in class, so that they can profit from the same students in private lessons. According to some estimates, Egyptian families spend more than $1 billion on private tutoring to compensate for poor education – a cost that often amounts to almost a quarter of household income.
One should be positively skeptical of the effect of rules such as "preventing public teachers from running private tuitions" (though it should be a starting point) in such situations because the above condition isn't arising from lack of such rule but due to an underlying governance failure resulting in poor implementation of everything. There are high chances that the new rule banning public school teachers from private tutoring, if framed, will also meet the same fate.

World Bank's report on lessons from Shangai's education system

TL;DR: Strong state capacity is the key factor for Shanghai's success.

World Bank released its report "How Shanghai Does It Insights and Lessons from the Highest-Ranking Education System in the World" on the world's top-ranked education system.

Summary of findings in executive summary starts with the following.
One finding is that Shanghai has a high degree of coherence between policy and implementation. The study does not find significant divergence between policy statements and reality. This noteworthy connection between policy and implementation can possibly be attributed to a number of factors, including the cultural and historical Chinese characteristics of top-down and centralized government administration; close monitoring of the programs and policies and alignment of performance with incentives; high levels of professional accountability among teachers, principals, and administrators within the education system; and, to some extent, modest and realistic policy statements and goals. 
Shanghai also stands out for its constant drive to renew and improve its education system and practices. 
I may be a victim of confirmation  bias here as my argument has been that weak state capacity is the binding constraint in our public education system and that our approach to reform has been through interventions as the anchor, glossing over this underlying problem.

Following the above, the report also mentions certain key characteristics of Shanghai - pairing low-performing and high-performing schools etc. It is highly likely that the debate would be around importing these interventions ignoring the aspect of strong state capacity.

In this context, it is useful to remind ourselves that Shanghai is successful not because of these interventions but because of the system which could come up with such interventions and implement them successfully. If we ignore this and simply overlay these interventions on systems with weak capacity, we can achieve disturbance but not disruption.

One should note that ideas for such intervention are rarely the underlying cause and these are not the one's that we should look to import. It's often the drive of the decision makers to address the problem and the underlying capacity to implement the ideas that yield results. Once these are present, ideas and results will follow, customized to contexts. For instance, watch these videos [here, here] of an inspirational IAS officer's initiatives in Maoist-affected Dantewada district of Chattisgarh. There is little coherence between ideas characterized as 'key' in Shanghai and the ones in Dantewada and it needn't be so. The common thing is the 'drive' and 'capacity'.

Focus on the drive to reform and enhancing the capacity. Ideas and results follow.

Subversion of 'rigour' by interest groups

TL;DR: Rigour and objectivity are only being used as a mask to discredit others but not in search of truth.

Evidence-based policymaking', 'data', and 'rigour' are the buzz words these days. The idea is that evidence will help make informed decisions. While most have been focusing on generating evidence with the assumption that it resolves the differences, there is an unfortunate trend which is resulting in the opposite, creating more differences. Data is being used not for making informed decisions but for selectively nit-picking ideological opponents, while subjecting oneself not to the same.

The discourse follows an underlying theme of "If it is my idea, it has to be implemented because there is no data 'against' it. If it is your idea, it should NOT be implemented because there is no data 'supporting' it." Only the ideas that one doesn't like are subjected to the 'rigour' while one's own ideas aren't.

The 'anti-private' school activist group's campaign 'for' RTE is following the same approach. Some people subject claims on performance of private schools to 'objectivity' and 'rigour'. If anyone says that students of private schools perform better than those of government schools, it is argued that the difference may not necessarily be due to the private schools but due to the background of the children attending these schools.

So far, well and good. One should always have ruthless commitment to get down to the bottom of the things, which is commendable. The issue, however, is with the selective application to the rigour only to those ideas that one doesn't believe in. Consider the issue of closure of schools due to RTE. The same group which subjects private schools to the extreme 'rigour' of considering confounding factors while making conclusions, conducted a survey to identify the number of private schools closed due to RTE and made conclusions without similar rigour.

[Archive] On IIT fee hike

Old articles published by News Laundry on IIT Fee hike.

1. "The IIT Hike: Debunking the myths"

2. "The IIT Hike:  A burden of death"

The trap of judging political parties using standard incentive frameworks

TL;DR: Standard incentive frameworks optimize for contexts of mediocrity. Anything worth achieving isn't achievable with a low threshold for negative incentives that can deter individual's actions.

Adam Smith once famously said 
"It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest."
The conventional wisdom is also that people do things they do as per the incentives structured around what they do. This principle is applied to explain people's behaviour and to design systems. If you want a person to get out and sell more books, pay the person per every book that he sells. If you want someone not to do certain task, make sure that the incentives are structured in a way such that the benefits of not doing the task are greater than the benefits of doing it.

We are thus accustomed to fitting everything into this standard framework of incentives. There are two distinctive features of this form of world view.

One, the incentives are perceived as instruments, external to the person, which can be used to carefully mend the actions of person of a person towards a desired direction. These instruments are considered to be sole factors driving individual's action. It doesn't consider the inherent desires and motivation of the person, which are independent of the external instruments of incentives. It doesn't expect people to use their motivation to overcome the constraints.

Two, strength of external instruments is placed above responsibility in case of non-action. If people in a system don't perform duties, the lack of incentives is cited as the constraint thereby placing emphasis over the external instruments. The individual isn't expected The external instruments are used as justification for non-action. Strength of external instruments triumph over responsibility in root cause analysis.

Understandably these presumptions are useful in most of the everyday cases. The typical case of an employee in a company, working only for a salary and is least bothered about his actions or in actions, as long as they don't threaten his employment. Thus, such standard incentive frameworks optimize for situations of mediocrity where individuals put their self interest over the effects of their action or inaction. Standard incentive frameworks thus try to align both self-interest and desired outcome using a range of external instruments called incentives.

Now, think about this. When was anything worth achieving made possible with individuals or organizations which function as per such standard incentive frameworks? For instance, consider Elon Musk. If standard incentive frameworks were to be applied, considering the seemingly insurmountable challenges that he faces, he should have not taken up ambitious tasks that he is working on. Consider Mahatma Gandhi. What incentives did he have to bear the pain to lead a struggle for decades to get independence to India? 

The stories behind achieving such challenging tasks go against the two basic premises of  the standard incentive frameworks discussed above. One, the action is not propelled by external instruments of incentives but due to a strong will and internal desire, independent of external instruments.  Two, responsibility lies with the person and external instruments aren't acceptable reasons for non-performance.

Thus, it is to be noted that great deeds are achieved by applying standard incentive frameworks.

Where do governments' functions fit in?

One may note that 'difficulty of the task' and 'relationship of person performing the task' indicate the usefulness of applying standard incentive framework. Not so challenging tasks that are to be performed by people who aren't supposed to be responsible can be optimized using standard incentive framework. Challenging tasks, on the other hand, require inherent desire to perform the task and ownership.

Coming to the governments, their functions stand amongst the most challenging. At the same time, governments aren't regular employees in a company who can shrug off responsibility. This puts  the critical governments' functions in the latter category that requires inherent desire to propel the actions and not external instruments and demonstrating responsibility without using external instruments as justifications. However, unfortunately, the government's actions and inaction are incorrectly categorized into the former category and standard incentive frameworks are used to analyze its action and inaction. The political economy theories outlining the constraints involved in decision making are used to justify government's inaction.

As one can see, this is obviously problematic. The external instruments are a matter of perception. One can use standard incentive framework to justify any inaction by suitably listing endless constraints involved. We forget that it doesn't absolve the government of the responsibility to overcome those. Governments aren't supposed to be driven by these constraints but by inherent desire to overcome these and march in the desired direction.

Dani Rodrik outlines good examples on similar lines in his paper "When ideas trump interests".
"During the 1970s, China was a centrally‐planned economy in which administered prices were a mechanism of generating rents and transfers to groups favored by the Communist regime. Price liberalization and the removal of obligatory grain deliveries to the state would generate significant efficiency gains in the countryside, where the bulk of the population lived. But it would come at the expense of depriving the state of its tax base, and urban workers of their cheap rations of food. By the standards of basic political economy models, these strong redistributive consequences provide an adequate explanation of why efficiency‐enhancing reforms were resisted by the Chinese leadership. 
But the Chinese government was able to devise a short‐cut..................
The point being  constraints are always present and at the same time, the solutions exist too. If ever we want to force governments to look for such solutions, we shouldn't let them settle in a comfortable equilibrium where we justify their inaction by subjecting them to standard incentive framework.

It is also important to note that addressing issues like enhancing the quality of education don't have clear-cut checklist of solutions. The nature of the problem is not as that where huge gains can be achieved by just pushing the governments once for a brief moment to do certain tasks, the way one could imagine about the 91 reforms, where a government with its few decisions for brief moment yielded drastic change. One must realize that it's not the case with issues like education. There are no pre-defined solutions. Solutions have to be evolved with constant iteration with a singleminded focus on the goal. It involves addressing many foreseen and unforeseen challenges in the journey. It can't be achieved with the mindset of standard incentive framework, where the expectation is that governments will only work till there is an incentive. If that's the case, even if there is an incentive in terms of public pressure, governments will either do something for showcase while not addressing the roots of the problem or governments can give up midway as new challenges emerge and the pressure diffuses. It isn't practically feasible to hold the government accountable on every single day to prevent that from happening.

In this context, political economy models outlining constraints for government's action often do more harm than good by giving governments armour to justify their inaction thereby making them settle in a comfortable yet unproductive equilibrium.

The next time, when someone argues that governments don't have incentive to improve education because of lack of incentives (it isn't an electoral issue etc.), please do remember the above. If governments behave like individuals without responsibility, deriving motivation only from external instruments, they better not be in government. After all, leadership is about leading people; it's not about moving ahead and standing in front of a group of people thereby claiming leadership. Of course, then complaining he (leader) isn't moving because people aren't moving.

Why are people apprehensive about 'private' in school education?

TL;DR: To fight resistance against 'private' in school education, improving public education system is the way to go.

School education is not supposed to be legally 'for-profit' in India. Private school sector is also heavily regulated, starting from the land to set up the school to the fee of the school. There is a tremendous resistance from a section of educationists and public at large to ease these restrictions on the private schools. Some of the reasons for support of such restrictions are discussed in my book (pdf, hardcopy) - page 150 to page 176.

This resistance is not just coming from the moral bias of viewing 'private as bad'. In fact, some of the wealthiest entrepreneurs like Azim Premji, who have made their fortune by running 'for-profit' private enterprises also advocate against considering private schooling as one of the ways to educate children. It's an interesting paradox.  It's because there is more to the story of 'anti-private' sentiment apart from the moral bias against private enterprise. 

Following are some such reasons of the reasons other than moral bias against private, which seem to make people apprehensive about the private sector in education.

1. Ensuring transparency in contracts of education service is difficult due to its nature.

Samuel Abrams of Teachers College, Columbia University makes this argument
To [Samuel] Abrams, the problem with for-profit operation of schools is not that businessmen are making money off the provision of a public service such as education. Textbook publishers, software developers, and bus operators all make money from schools and should, he said, but they are all providing a discrete good or service that can be easily evaluated. “School management, on the other hand, is a complex service that does not afford the transparency necessary for proper contract enforcement,” he said. “Without such transparency, there’s client distrust: parents, taxpayers, and legislators can never be sure the provider is doing what was promised; and the child as the immediate consumer cannot be in a position to judge the quality of service. Regular testing has been promoted as a check on quality. But teachers can teach to the test. And worse, as we know from cheating scandals in Atlanta and many other cities, teachers can change wrong answers to right answers on bubble sheets once students are done.
2. High transaction costs involved in changing schools making parents helpless or susceptible to exploitation.

Changing schools isn't as easy as changing the pen. Even if parents have the choice to move their child to another school, it's a tough decision because changing a school is not just a change in physical location of where they avail the service. The child also has to shift mentally from one setting to other, and there are numerous other factors that are to be taken into account. This can make it difficult for parents to seek accountability from schools making them vulnerable.

4 thumb rules to detect slow progress in reforms - Positive externalities of slow reforms

Almost every public policy problem is termed 'complex' and needs 'reforms'. What's the sign of slow progress in reforms? 

Slow progress in 'action' results in following four things which can be used as thumb rules to check the pace of reforms.

1) Reports of committees outlining reforms end up being syllabus of civil service examinations

Consider the case of 2nd Administrative Reforms Commission (ARC). It gave a comprehensive report on administrative reforms that are to be undertaken. What ended up happening? 

  • There's a little progress on implementation of such reforms. Instead, these reports occupied 'must read' section of syllabus of recruitment to Indian civil services.

  • Every year scores of UPSC aspirants learn the ARC reports by heart to be reproduced in the exam. 
  • They occupy a space of bookshops famous for selling reading material to competitive examinations.
  • Coaching institutes summarize these reports to ease students' burden and sell them.

2) A new branch of academic literature is initiated to study the lack of progress

People in academia initiate a new strand in academic literature to study the 'slow progress.

  • Various political economy models are proposed to explain the dynamics of inaction (emphasis on the irony of the term - two contradictory terms)

  • Fancy researchers even construct game theory models. 

3) Definition of 'radical' changes. Ensuring basic pre-requisites becomes radical

If inaction continues for long, even basic aspects become radical.

  • Owing to lack of efforts from government, ensuring teacher attendance and strict action for absence is now being viewed as a radical step.

4) Scores of second-best solutions emerge

What to do when the government can't take action against absenteeism? Obvious - give them monetary incentives. Such approaches have an underlying presumption that governments can't take the hard approach and hence settle for such solutions.

It only needs someone like this to remind that one doesn't need to complicate the problem by thinking about designing complex incentive systems to ensure attendance, which only result in marginal effects at the best. It just needs the will to get things done.

Positive externalities of slow reforms

Following the wise advice of 'look at the best in others', if one looks at the 'best' in 'inaction', one realizes that inaction regarding reforms is generating employment, putting many people to work
  • Book shop owners who earn money by selling reports of committees on reforms.
  • Photoshop outlets who earn money by distributing such reports
  • Thesis topics for students to study the inaction
  • Papers for professors to study the inaction
Question to think about - what would Keynes have said this form of generating employment?

Case against communicating research inform of laundry list - Proposing a new way to use the evidence

The growing popularity of empirical research in development economics has resulted in a rise in the number of studies on the impact of 'interventions'. All of these are supposed to help policy makers make informed decisions and build a culture of evidence-based policy-making.

The summary of the literature on the impact of interventions is often communicated in the form of a laundry list of interventions that work, didn't work and some occasional cases of negative impacts. For example: increasing inputs - no effects, reducing PTR - mixed effects, teacher incentives - mixed effects, data-driven instruction - positive ve effect, and so on.

Apart from the first and obvious concern of 'will such intervention work in my context', communicating the evidence in the form of such laundry list is of relatively little utility to the decision maker, for many reasons.

1. Laundry lists are of little utility in case of prerequisites

What will the decision maker do with the evidence of interventions on the effectiveness of ''prerequisites"? By 'prerequisites' we mean interventions like building schools (where there are no schools), easing access to schools, building toilets, reducing PTR etc.

If the laundry list says that spending on infrastructure doesn't result in outcomes, does that mean that the decision maker should stop spending on improving the infrastructure? Obviously no. 

If the laundry list says that School Management Committees (SMCs) are ineffective, does that mean that the decision maker should scrap SMCs? Obviously no.

The decision will and should continue improving infrastructure and institute SMCs despite such evidence. Thus, looking at this evidence in the form of laundry list adds little utility.

2. Laundry lists are of little utility in case of mixed evidence

What should the decision maker do with a statement which says that there is mixed evidence on reducing PTR? Does that mean that the decision maker should continue the situation of classrooms with 1 teacher per 100 students? Obviously no.

3. Laundry lists conceal the capability deficiencies.

Most often, the binding constraint in low-capacity systems is the capacity to 'do things'. Thus, prescribing an 'act' to be done to such 'low-capacity' systems may mislead the decision maker and not be effective in long-term.

For instance, prescribing 'data-driven instruction' to low-capacity systems make them pursue the reform with the idea (data-driven instruction) as an anchor. It conceals the capacity deficiencies to pursue that idea. 

The analogy of a patient suffering from vomitings due to digestive system failure is helpful here. Let's say that patient 1 is vomiting whatever he eats because of weak capacity to digest and as a result has developed weakness. Now suppose that you identify the weakness and venture out to strengthen the person. You test a type of food on another weak person (patient 2), who is weak not due to weak digestive system but lack of food, and find the new food to be useful in addressing weakness. You come and prescribe the patient 1 to eat that food. Would that be useful? Most likely patient 1 throws up that too.

'Food' here is equivalent to 'idea' and 'digestive system' is equivalent to 'state capacity'. Pursuing treatment of a weak person by prescribing 'new food' puts food (idea) as anchor of the reform. It is useful in cases where the binding constraint is lack of food but not in case where the binding constraint is the lack of capacity. Since this way of treatment identifies lack of food as the binding constraint, if one idea doesn't work the problem is ascribed to food and pursues treatment by hopping from one food to the other, driving the focus away from the problem of weak capacity.

Similarly, 'prescribing' new ideas to be implemented in form of laundry lists to weak capacity systems incorrectly identifies the binding constraint as lack of 'ideas' and puts ideas as the anchor of reform. Pursuing reform with such ideas as anchors shifts the focus away from identifying and addressing the capacity deficiencies.

How to use evidence on the impact of interventions?