Part I: policies toward private education chapter 1
Public policies toward private education: An international comparison

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Abstract

This chapter surveys the wide range of public policies toward private education that are found in a sample of 35 developed and developing countries. It investigates two major questions: What is the relationship between subsidies and private sector size? Are subsidies accompanied by controls and if so, over what? Empirical evidence shows that private educational sectors in developing countries tend to be less subsidized than those in developed countries; nevertheless, they are often very large. This chapter argues that private sectors can flourish in developing countries without subsidies because of excess demand, while subsidies are a necessary condition for large private sectors in developed countries, where a free public alternative usually exists.

Government controls over private schools are found even without subsidies. However, heavy controls invariably accompany subsidies, particularly over teacher salaries and qualifications, price and other entrance criteria. Large excess demand driven private sectors in developing countries have been criticized for their low quality, which is supposed to be raised by government regulations regarding organizational form and minimum input requirements. However, these interventions are often evaded by producers and consumers and, if not evaded, quality may come at the expense of quantity and efficiency.

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    In a selective education system, the level of private sector involvement in primary and junior secondary levels deserves consideration since the resource constraint in junior secondary and higher levels of education is important for understanding the policy makers’ appeal to the idea of selection through examinations. In the literature too, quantity (average number of years of schooling completed by a cohort) and quality of education (while not always explicitly defined, referring to acquired knowledge and cognitive skills as a result of school attendance) are generally viewed to be conflicting objectives in the presence of a budget constraint (James, 1991; Mingat & Tan, 1985).8 In some cases, an efficient way of relaxing the capacity constraint might be abolishing over-restrictive regulations on private schools and even encouraging greater private sector participation in education since management practices of private schools seem to be superior to those of public schools (Lockheed & Jimenez, 1994).

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