The cognitive dissonance associated with "for-profit" schools

Schools are not supposed to be "for-profit" in India. But why? There are several arguments and counter arguments to this, which I discussed in my book.

All those arguments apart, I am increasingly coming to believe that the arguments for not allowing "for-profit" schools are rooted more in skewed mental models, rather than in any sound reasoning. The various reasons cited to not make schools for-profit are only force-fitted justifications to defend the underlying cognitive mental traps.

Else, how do we explain the paradox of proliferating for-profit education companies and tuition centres. All of these also form a part of "educating the child". However, people seem to have no problem with them being for-profit but they somehow have problem with schools being for-profit. 

The latest example is the Byju learning app. It's an app which claims to have all video lessons for content of a chosen grade. Each subscription costs a whooping Rs. 23,000/- per year (it's the basic price and the cost increases with increasing features).  The Ken reports that Byju's revenue last year, through subscriptions of this app, was an astronomical sum of 850 crore. 

Now, consider this. An organisation makes an app, through which it claims to provide content of a particular grade, in the form of videos. In this respect, it's similar to any traditional school. This organisation charges Rs.23,000/- per year, which is more than the fee of any average private school.

This organisation can be for-profit despite doing the same thing that schools do but schools can't be for-profit. Did you the get the irony or cognitive dissonance (whatever you may choose to call it)?


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Sociological effects of globalisation and unaffordable housing

This article has a beautiful summary of Christophe Guilluy's sociology work on how globalisation is transforming French society and its repercussions.

The standard narrative of globalisation is that it makes processes efficient, making goods cheaper. The movement of labour to developed countries creates jobs at lower end of the spectrum, that provide valuable services like baby care, house cleaning, drivers etc.

All of this is true but the interaction of these phenomenon with public policies can have different effects. Christophe Guilluy describes these in France's setting as follows:

On victims of globalisation

France’s best-performing urban nodes have arguably never been richer or better-stocked with cultural and retail amenities. But too few such places exist to carry a national economy. When France’s was a national economy, its median workers were well compensated and well protected from illness, age, and other vicissitudes. In a knowledge economy, these workers have largely been exiled from the places where the economy still functions. They have been replaced by immigrants
Paris offers the most striking case. As it has prospered, the City of Light has stratified, resembling, in this regard, London or American cities such as New York and San Francisco. It’s a place for millionaires, immigrants, tourists, and the young, with no room for the median Frenchman. Paris now drives out the people once thought of as synonymous with the city. 
Further, effects of public policies 
......After the mid-twentieth century, the French state built a vast stock—about 5 million units—of public housing, which now accounts for a sixth of the country’s households. Much of it is hideous-looking, but it’s all more or less affordable. Its purpose has changed, however. It is now used primarily for billeting not native French workers, as once was the case, but immigrants and their descendants, millions of whom arrived from North Africa starting in the 1960s, with yet another wave of newcomers from sub-Saharan Africa and the Middle East arriving today. 
........ A public-housing development is a community, yes, and one can wish that it be more diverse. But it is also an economic resource that, more and more, is getting fought over tribally. An ethnic Frenchman moving into a heavily North African housing project finds himself threatening a piece of property that members of “the community” think of as theirs. Guilluy speaks of a “battle of the eyes” fought in the lobbies of apartment buildings across France every day, in which one person or the other—the ethnic Frenchman or the immigrant’s son—will drop his gaze to the floor first. 
....... even if French people were willing to do the work that gets offered in these prosperous urban centers, there’d be no way for them to do it, because there is no longer any place for them to live. As a new bourgeoisie has taken over the private housing stock, poor foreigners have taken over the public—which thus serves the metropolitan rich as a kind of taxpayer-subsidized servants’ quarters. Public-housing inhabitants are almost never ethnically French; the prevailing culture there nowadays is often heavily, intimidatingly Muslim.

Guilluy makes 4 important points

1.  Victims of globalisation and its sociological effects: As non-natives occupy cities, prices in functional part increase making leading to stratification, making it unaffordable for the kind of people who once used to inhabit the city.

The natives are forced to periphery but immigrants occupy the functional parts of the city, changing its character. This can be mentally difficult for natives to adjust.

This needn't be true for just immigrants and globalisation. This can be true for intra-country migration in countries like India too, in case of cities like Bengaluru, witnessing huge influx of people who speak different language.

2. The importance of housing: Affordable housing is going to be crucial with growing urbanisation. Guilluy points out that in London, the average monthly rent (£2,580) now exceeds the average monthly salary (£2,300).  This has two effects
  • High prices of housing may reflect the market demand and supply but such situation is sociologically difficult to be sustained.
  • High price localities also tend to have good public facilities like schooling etc. Unaffordable price thus has second order effects, where it creates barriers to access such facilities, thus exacerbating inequalities.

3. Ethnic conflict due to globalisation and urbanisation?: Standard models of social capital tell that inter mingling of communities help reduce the "fear of unknown" making people more tolerant of other cultures and traditions. But if this is in a resource crunched context, where there is a tribal competition for resources, ethnic fault lines may deepen instead of reducing, as narrated above.

Such conflicts deepen if public policies advantage one community over the other, like in case of French where affordable housing preferred immigrants over natives.

4. Taxpayer subsidized workers: This, according to me is a novel way of phrasing the argument. Elite can access low-wage services only if the workers stay close to the localities of the rich. The housing of localities where workers stay are either subsidized or tends to be slums.

Thus,  the low-wage services to the elite aren't possible without the subsidized workers. It would be good if the elite who scream at even the whisper of welfare programmes, realise this and be little humble. Elite are also beneficiaries of lot of unseen subsidies.

Affordable housing in urban areas is going to be a big issue in future. We need to be cognisant of not only its benefits but also its sociological consequences.


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Achieving outputs may be daunting in itself. Yet, we need to focus on outcomes

Gulzar Natarajan has a post on the limitations of outcome oriented approach of development. Gulzar points out that 

1. Mere financial incentive for achieving outcomes isn't enough to overcome the large process issues.

2. Addressing some critical inputs (teacher attendance) in itself can be a daunting task. So, expecting it to be an incidental benefit to outcome based approach is unrealistic.

3.  It isn't easy to re-allocate resources to achieve the outcomes.

So, Gulzar argues that "it is unrealistic to target outcomes in cases of public production involving engagement intensive activities (education, health)".

There's some truth to this argument, depending on the state of the system. Consider this story of Mr. Manoj, District Education Officer of Deoria, Uttar Pradesh. Mr. Manoj is an upright officer facing all odds to get teachers to school. He gets death threats, his office is vandalized and many other things. He even carries a pistol with him for safety purposes.

In a failed system like that with so many things broken, when Mr. Manoj has to spend enormous energies on just ensuring teacher attendance, it may sound unfair to expect him to focus on other elements or outcomes.

While all the above is true, I argue that there is still value in practising outcome based approach over output based approach, for the following reasons. I put the reasons in two categories - harms of following output approach and advantages of outcome approach over output approach.

Potential harms of output approach

1. Defining outputs in a certain manner and focusing on them can be detrimental: The problem with outputs approach is that it's subject to wide interpretation. Defining outputs in a certain manner can actually be detrimental, especially when it comes to monitoring metrics of personnel. "Completion of syllabus" and "Ensuring all CCE papers are checked" are examples of two such output metrics that have turned detrimental.

Excessive focus on completion of syllabus is taking away the focus from "did the children learn?" to "did the teacher teach?", creating a perverse system. It creates a false illusion that the job has been done when in fact it has not been done (child hasn't learnt), thereby misleading us. It also creates an additional hurdle for reform because one has to first bring people out of such illusion, which is a difficult task.

Similarly, these days, CCE support and monitoring of teachers is reduced to output metrics of "did the teacher enter marks in the register?", taking the focus away from the real essence of CCE. All that the teachers now are worried about it is, whether the marks have been entered in the CCE register, regardless of how the correction is done, whether they learnt something about the children in the process, whether they incorporated these in their next session etc. To make matters worse, sometimes teachers make students correct papers themselves and enter the marks, achieving the "output".

In all these cases, focus on outcomes would have helped to avoid this tragedy.

2Piecemeal approach "undoes" the already achieved gains: Following one output at a time (piecemeal approach) has the danger of undoing the progress made in achieving earlier outputs. For instance, for first 10 years, governments work only to construct schools and ensure schools in all locality. Once that's done, in next 10 years, they work to ensure teacher attendance, in next 10 years, some other issue. By that time, the schools have been damaged and need reconstruction. So, we are back to square one.

Thus, piecemeal approach may not appropriately leverage the gains already made regarding certain outputs as they decay with time.

Advantages of outcome approach

Apart from preventing the two dangers mentioned above and many others, there are four distinct reasons to pursue outcome approach.

1. Cognitive reasons: Lant Pritchett in this short video "Selling solutions vs. Solving problems" brilliantly illustrates the effects of mental models on policy approaches.

At the risk of simplifying, Lant says that when people are asked to write down the problem they want to solve, they often write solution. For instance, in education, people write "lack of teacher training" as the problem. When one defines the problem in that manner, the only solution to that can be "teacher training".

This is in other words defining problem in terms of the solution that one wants to have. Defining problems in that manner hinders our ability to dig deeper.

This mode of thinking is seen across the spectrum from education activists to bureaucrats. Daunted by the experiences of the problem, one specific immediate issue clouds our cognitive space, crowding out other elements.

The effects of such thinking gets amplified when it's prevalent at policy making stage. We end up pursuing a piecemeal approach instead of an integrated approach. The consequences are clear, as the history suggests.

Immediately after independence, the problem of lack of schools seemed so daunting that we defined the problem of schooling as "lack of schools", neglecting all other aspects. After 60 years, we realized that this isn't sufficient. Now, we may realize some other daunting problem, let's say teacher attendance. Now we focus on that for another few decades and so on. I think the point is now clear. 

The lesson is that focusing only on one particular element, even if it's daunting, shuts our attention to other elements of the problem and delays the process.

Thus it is still important to define and approach the issue from an outcome perspective. If not anything, outcome based approach at least keeps all elements required to achieve the outcomes within our cognitive attention space.

2. Outcome approach ensures best possible outcomes at each point of time: Pursuing outputs is a sub-optimal approach, as it fails to extract the maximum possible from the system at any given point of time. Let me explain.

There is diversity in a system. For instance, if we consider a district, when we say teacher attendance is the issue, it doesn't mean that it's the issue in every school and is of same severity. It might be less severe in the schools in the district headquarter. 

The problem for such schools is - conditional upon ensuring teacher presence, how do we ensure outcomes? With further actions, we might leverage the specific advantages of this situation.

An output based approach, let's say ensuring teacher attendance, neglects such schools with enough teacher attendance. It thus costs us the gains that would have been achieved by leveraging the advantages of these schools.

On the contrary, if we follow an outcome based approach, we figure out that the issues are different in each case. While we still pursue the daunting task of ensuring teacher attendance in rural schools, we also try to work on the schools that already have attendance and try to get best out of them. That way, even if it's small, we extract something out of the system, instead of nothing.

3. Outcome approach speeds up the reform by leveraging the institutional knowledge: Outcome based approach in context of diversity builds institutional knowledge that speeds up the reform process in lagging schools.

For instance, in a district, if we improve the schools that are already attendance complaint, it builds institutional knowledge in the system. Such knowledge is useful to improve the current non-complaint schools, that might become complaint in future. It thus saves precious time and energy. 

Else, as discussed above, if we wait till every school becomes attendance complaint, before we take the next step, it might take so long that by that Elon Musk's Neuralink might have developed a device to download data to brain by that time doing away with the need to learn, making schools obsolete. Meanwhile, a generation or several of them would have been denied benefits of education.

4. Outcome approach helps realize the missing elements and creates a demand for them: When one follows an outcome approach, one realizes the need for some elements, which aren't otherwise obvious. One may argue that it costs money to achieve all these and hence is unrealistic. But the point is that there is value in realizing the need for these elements, even if they are not met. Also, such realization helps build pressure, which if not now, may help in long term.

Daunti-ness is a function of "will" also, not just the "nature of task"

Tasks that seem daunting may not be actually so if it's matched with commensurate will. These tasks seem daunting because, till now, efforts to streamline the systems were a result of "bureaucratic will" and not "political will" (recollect the example of Mr. Manoj, DEO, discussed above). When efforts are the result of bureaucratic will, without political will, the limitations are obvious. The task will end up being daunting to the bureaucrats as they are leading it alone.

There is no reason why we should hence accept this context as given and work around it. Instead, we should identify this as the problem and  try to address it.

The argument is that when there's strong political will focusing on outcomes, tasks that seemed daunting once don't seem any more. 

This might seem a nice hypothetical argument that's good for theory but not for practice. But we have examples of not-so developed countries like Poland that once faced similar issues like ours, revamping their systems within a decade. 

One might still point to the Indian exceptionalism but the  recent Delhi experience shows that it's possible in India too. To be fair, Delhi has its own advantages by the virtue of being a city, with closely networked schools, making many things relatively easier. Even then, given this context, consider the amount of work and the range of work that's done in past 2 years in Delhi.

1. Appointing estate managers to schools relieving principals of the administrative duties.
2. New classrooms construction to meet the needs.
3. Large scale learning melas to remediate children in higher classes.
4. Teacher training
5. Principal training
6. Building strong SMCs

... and so on, with a strong focus on outcomes. Once the outcomes were the focus, it was realized that many other things are to be done in order to achieve it. Thus, the individual outputs that would have been an individual scheme in themselves, became incidental to the overall goal of outcomes. One could thus get a diverse range of things done within short time, instead of doing them one by one.

If these initiatives were to be done together at the same time at scale by a bureaucrat alone, without strong political will, these would have been termed daunting++ and considered out of reach for any bureaucrat. Such cognitive limitation would have settled bureaucrats to pickup only one of these elements and pursue it, delaying the progress.

In short, many tasks may seem daunting to be dealt with "bureaucratic will" but political will can reduce the daunting nature of tasks. Thus, we do have a way out of the limitations of outcome based approach. We therefore need not consider certain constraints as given and settle for sub-optimal output based approach.

Nature of 'political will' and the 'approach' matter

Often, actions taken under compulsion to do something or at least appear to be doing something masquerades as an illustration of political will. It results in interventions that gloss over state capability constraints. It serves the purpose of self-satisfaction as "something is being done", but it's not useful for outcomes. On the other hand, "appropriate will" has laser sharp focus on outcomes and goes to any extent to achieve it. One might argue that such "will" is not possible. We then better forget about addressing issues like education and health care.

Similarly, an appropriate approach is needed because incorrectly spent political will (herehere) only hurts in long term.


Despite the daunti-ness of achieving outputs and limitations of outcome based approach in business as usual scenario, there is still value in pursuing outcome based approach. Output approach creates a false illusion of job done and can undo the gains already achieved. Outcome based approach keeps all the essential elements within our cognitive attention space, extracts maximum from the system at each point of time, and speeds up the reform process. Further, daunti-ness is a function of "will". When a daunting problem is met with a commensurate will, it can and will become the incidental benefit to the final outcome. We thus need appropriate political will and an appropriate approach.


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UP follows Gujarat - Regressive laws in education

In an earlier post, I had discussed Gujarat's regressive law to cap private school fees. Now, UP is moving in a similar direction.

Just to recap, cap on private school fee is regressive for the following reasons.

1. Schools are already supposed to be not for profit in India. It means that the excess revenue must be reinvested in schools. 

It therefore follows that current fee of schools should reflect their costs. If schools fudge records, government can audit them.

Imposing fee cap over this rule is self contradictory. If school fee is reflective of costs, what's the need to cap them?

2. There is confusion between tuition fee and fee charged for other aspects like books, bus etc.

As response to not for profit clause, schools instead charge abnormally on bus fee, uniforms etc. Parents complain about this.

In response to parents' complaints government caps tuition fee. In other words, capping tuition fee doesn't solve high fee in other aspects.

In fact, schools might start charging even more to make up for losses.

3. Fee cap regulations hurt schools' innovation and inturn limit the number of choices for people.

To begin with, we pushed people to private schools by not providing quality public education. Now, we are stifling quality in private schools too by strangulating them.

Given that the not for profit clause is a controversial issue and isn't easy to do away with (it needs both state and central governments to change laws and also correct some SC judgments), we need to follow a least destructive path.

Government should instead audit schools to check their claims instead of capping the fee. Needless to mention, this needs political will to break down political economy around it and school-politician nexus. Inability to do this shouldn't be an excuse to cap fee.

Mandating strict completion of syllabus - Yet another regressive step

In addition to all these, UP is thinking of framing strict rules to complete syllabus within time. This rule is equally regressive.

In a world, where people are moving away from syllabus completion to focus on outcomes, from time bound completion to learning as per one's own pace, this is a regressive step. Lant Pritchett has called this over ambitious curriculum, and argued that much of the difference between OECD and other countries can be explained by the negative consequences of over ambitious curriculum. I had earlier argued that the first and foremost step in education reform has to be a shift away from syllabus completion.

UP is key to improve India' s macro situation

UP is the most populous state in India. One can't make any significant dent on India's overall education, without improvements in UP.

UP's learning levels are 13% (percentage of grade 5 students who can read grade 2 text), while the national average is around 50%. It's the one of the lowest in the country. Worse, it has been declining.

In such a serious context, it's just saddening that UP is moving on a regressive path, instead of being on a path of improvement.

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Gujarat's regressive law capping private schools' fee

Legislature of Gujarat state in India recently passed a bill capping annual school fee of self-financed (private) schools. As per the new act

  1. The total annual fee, including the admission fee, should not exceed Rs. 15,000/- for primary, Rs. 25,000/- for secondary, and Rs. 27,000/- for higher secondary schools.

  2. This applies to all private schools in Gujarat affiliated to Gujarat State Board, CBSE, ICSE. (It's not clear if it applies to IB. India Times says that IB schools are also included, while some other sites say that it applies only to CBSE, ICSE and State Board, and not IB.)

  3. Schools are to take permission from a government committee before hiking the fee.

  4. The committee will have powers to suomoto action against schools. It can even cancel school's recognition.

Five issues regarding fee cap

There are five issues are to be noted here. One, the sequence of one bad policy leading to the other. Two, the conflict between rationale of not-for-profit clause in education and cap on fees. Three, confusion between different types of fee charged by the school. Fourth issue is the obvious point regarding its effect on schools. Five, the low cap.

1. Schools in India are supposed to be not-for-profit (My book has chapter on various arguments for and against this rule). It means that the additional revenue generated by schools have to be utilised on the school itself and can't be taken out of the school. This constrains managements to utilise profits for other purposes.

In order to get around this policy, schools charge additional fee for textbooks or force students to buy particular textbook, earning commission on such transactions. Charging disproportionate money for school bus is another usual way. These technically don't come under school fee and hence money generated through this is considered as profit earned similar to any other for-profit enterprise.  This is similar to movie theatres in Tamil Nadu charging abnormally on popcorn to get additional revenues, in response to cap on ticket price.

Parents find these additional fee unfair and disproportionate. They are forced to use these services and hence they naturally complain about "high fee".

Thus, constraining schools in one aspect leads to unfair practices in other aspect. In order to regulate this, government is bringing a law to cap school fee, one bad policy leading to another.

2. The logic of fee cap isn't clear when there's already a rule mandating not-for-profit nature. If there's already a rule mandating not-for-profit nature of schools, it means that current tuition fee charged by schools even if it's high, is reflective of the costs, since there's no profit making from that.

What's the point in again capping school fee when the school fee, even if it's high, is reflective of costs? Does it mean to say that government is mandating schools to be not only not-for-profit but also cheap?

If government thinks schools are fudging the accounts to mask the not-for-profit clause, wouldn't auditing them be a way out, instead of capping the fee?

3. There is a confusion between different types of fee charged by schools. Minister's remarks illustrate this confusion.
“Donations are being taken beyond imagination. Schools decide which brand of shoes to buy and from which shop. The sale outlets of these brands are set up within the school compound and the parents are forced to buy uniforms, water bags, shoes, school bags, etc. This is not a good precedent.” 
“A crorepati family once told me that his grandson’s school had asked him to bring Rs 25000 for a celebration of a festival. He said he can easily afford the amount. But what right does the school have to charge such an amount,” Chudasma said adding that the schools across the state have been involved in collecting fees for Holi, Uttarayan and Diwali celebrations. “This is not fees. It is extortion. This has caused personal pain to me. I cannot bear it any more and so we are bring in this legislation,” he added.
If the real problem is the "unfair amount collected for additional services like uniform, books, festivals etc", it isn't clear if regulating the "usual annual tuition fee" stops the unfair practices in other aspects, unless the bill means that the cap also includes fee of the additional services (books, uniform etc).

4. It is argued that only few hundreds of schools are affected by this, that's no reason to support this. One should note that good quality education costs money, even if it is done with not-for-profit motive. It is especially true for schools in cities that have high infrastructure and human personnel costs.

Ahmedabad is home to some innovative schools, part of India's rare species. I suppose most of them will be affected by this new law and if this is implemented strictly, they will suffer.

5. Even if one puts aside all the above arguments and accept the fee cap, for the sake of argument, the stipulated cap is too low for any good school to function.

Good education costs money

While it is true that good private schools are often unaffordable to many, the sad truth is that good education costs money, even if done with not-for-profit motive. The high costs of education aren't usually visible because government usually bears it. There's a reason why governments spend money on school education.

We have created this mess

In an ideal world, most students would be attending good quality public schools and such high-cost private schools are attended only by a select few who have special requirements. By failing our public schools, we have forced people to shift to the unaffordable high-cost private schools and in response to the backlash, we are trying to strangulate private schools.

In the process, we have made parents devoid of good schooling in both private and public sector by strangulating private schools and not taking any significant steps to improve public education.

With the growing significance of private schools, such pressures are only meant to increase. If the past behaviour is any indication, the governments are going to yield to the pressure.

If only our public schools were better, we wouldn't have gotten into this complex mess.

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