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Acknowledgements
This article was prepared for presentation at the ‘Contributions of Economics to the Challenges Faced by Education’ conference, University of Dijon, France, 21–23 June 2006. I would like to thank Susanne Clawson and the Editors of this journal for valuable comments on an earlier draft of this article. All errors of omission or commission, of course, are mine.
Notes
1. While the framework has changed dramatically, many would argue that the Poverty Reduction Strategy Papers (PRSPs) still turn out country economic policies that look like SAPs.
2. The hegemonic nature of neoliberal globalisation does not negate its complexity or its contradictions. In particular, Santos’s discussion of ‘counter‐hegemonic globalisation’ and ‘globalisations…from below’ (Dale and Robertson Citation2004, 147, 149) is very relevant to understanding the challenges to this Washington Consensus in education, as I discuss in conclusion. Also see Dale (Citation1999) and Stromquist (Citation2002).
3. Nationally imposed user fees are just one of the many costs families face in sending even primary school age children to school; other costs include other explicit fees, transportation, uniforms, books and materials, and, often most important, the opportunity costs incurred by losing the work performed by a child when they are in school. Primary school age children in developing countries provide essential household labour such as tending animals, minding children, and getting water and firewood. Street and working children in urban areas often provide income essential to family survival (Bray Citation1996; Fair Citation1998; Klees, Rizzini, and Dewees Citation2000; Mickelson Citation2000). It is a testament to the burden of these costs that even the relatively small additional costs imposed by new user fees have pushed so many children out of school, as discussed below.
4. One connection between individual user fees and community contributions was illustrated in Zambia. When national user fees were eliminated in 2002, communities stopped contributing to school maintenance and construction since they interpreted the government’s free education policy as really meaning free education (World Bank Citation2006).
5. I do not explicitly discuss user fees for secondary education, but the arguments against user fees for primary and higher education generally apply.
6. There is no evidence that resources saved by increasing higher education fees over the past 25 years went into investment in primary schooling as the proponents had promised.
7. The idea of ‘efficiency’, as used by neoclassical economists, makes little sense in theory, let alone in practice. It is seen as some global accounting criterion, guiding decision‐makers to investments where no one loses and there are net gains (i.e. benefits outweigh the costs) for some fictitious entity called ‘society as a whole’. To the contrary, in a world of inequality and conflict, there are winners and losers from all social choices. ‘Benefits to whom?’ and ‘Costs to whom?’ are the questions in the real world. In practice, cost–benefit analysis serves as a technical mask, obscuring how decisions are made in the interest of those who have wealth and power (Klees Citation1986, Citation1993, Citation2008; Easton and Klees Citation1992).
8. The problematic nature of user fees is indicated by internal Bank discussions of raising user fees to the ‘riot threshold’ – that is, enough to get maximum revenue without going so high that people take to the streets to protest, as was the case with widespread demonstrations and some violence in Ghana and Jamaica when university tuition was raised (Psacharopoulos and Woodhall Citation1985). Neoliberal policies that have cut government subsidies for other basic needs, like food and transportation, led to similar reactions in many countries. The economic crisis in Argentina was partly due to the same problematic logic. The IMF withheld about $1 billion in loan money it had approved to Argentina to force it to implement further neoliberal policies The result was that the Argentine government was forced to cut pensions, salaries, subsidies, etc., leading to widespread demonstrations, some violence, and the fall of a government quite friendly to neoliberalism. From this point of view, the problem was technical. The IMF simply miscalculated the ‘riot threshold’; if it had withheld less money, the government would not have had to cut as much, and the protests could have been avoided.
9. Carnoy (Citation1999) argues that measured RORs (not including externalities) to higher education is increasing, but it is interesting to note that was not part of the evidence used to reverse Bank policy in favour of greater higher education investment (Task Force on Higher Education and Society Citation2000).
10. This was a rhetorical stance only. All three raised taxes.
11. As a relevant example, a real ROR of about 15% to higher education investment, as often found without even considering externalities, is generally higher than average returns in the private sector. If so, neoclassical economics argues that efficiency demands resources be shifted from the private sector to the public sector and invested in higher education. Subsidies to higher education should be raised, not lowered. The argument that education has private returns to individuals and therefore they will pay for it themselves is specious within the neoclassical economics framework. People are already investing their own resources (to the extent they can afford to) in higher education based on their judgments about its private ROR; cutting subsidies will simply reduce total investment in higher education, not increase it.
12. In neoclassical economic theory, competition does not yield innovation. If there is true competition, not just a few firms with oligopoly power, firms do not innovate because, even if successful, they cannot capture the benefits of that innovation as other firms can quickly copy what they do (in theory, competitive markets should not have patent protections). This makes it unwise to spend money on research and experimentation. In education, this is borne out in the relatively few alternative models seen in private schools (Belfield and Levin Citation2001; Lubienski Citation2001; Public Policy Forum Citation2001).
13. There also is a public school voucher experiment that began in Washington, DC in 2005, but no data are available yet.
14. Belfield (Citation2001, 1) argues that despite the rhetoric, ‘Vouchers are not a “live issue”; there is lots of discussion but not much action.’
15. Most of these ‘innovations’ have been tried in the past, as new generations forget or ignore the lessons of the past. Merit pay for teachers was part of the US school reform movement in the early 1900s!
16. A notable exception is that in 2007 Florida was set to initiate a statewide programme to tie teacher salary raises to their students’ test score gains (Whoriskey Citation2006).
17. When merit pay schemes are implemented, they have not improved teacher performance (Murnane and Cohen Citation1986; also see Halachmi and Holzer Citation1987).
18. In theory, for an educational production function to yield accurate results, it must include all variables that affect the outcome of interest, the variables must be measured accurately, and they must be combined in the correct functional relationship, conditions that are never fulfilled.
19. These are the same type of problems in disentangling causal impact discussed earlier regarding isolating the effects of schooling on earnings which is needed to calculate RORs, and they are similar to the problems to be discussed below regarding attempts to reward meritorious schools.
20. Anecdotal evidence indicates that the Chilean educational voucher system resulted in the private accumulation of considerable wealth.
21. In education in developing countries, the use of cost–benefit analysis was seen as the antidote to the economic irrationality of planning and evaluating education by its ability to produce ‘manpower’ that fulfilled the needs forecast by economic planning (Psacharopoulos Citation1991).
22. In education, there is considerable contracting out to the private sector for things like building schools or running a cafeteria, but these experiences with well‐defined school inputs have little to do with OBA, which runs into trouble when things are much less well defined.
23. Some might argue that privatising education through reliance on local NGOs might prove to be positive. I do not think so – not on any large scale. Again, there is no evidence that private schools, including community‐based ones, perform any better than equally funded public schools serving the same students. NGOs often do excellent innovative work in small‐scale model programmes, but a country of NGO‐run schools raises serious questions of coordination, supervision, accountability, regulation, and others discussed above. Switching to a world of NGO‐run social services is neither feasible nor desirable (Burde Citation1998; Subramanian Citation2008).
24. The Bank’s Fast Track Initiative to help countries reach EFA goals falls far short of what is needed to achieve them.
25. Neoliberals always respond to recommendations like these by arguing that there is no tax capacity to do so, that taxing those with wealth will discourage their entrepreneurial efforts through which jobs and wealth will be created for the rest of the world. Obviously, this strategy has not been successful. Moreover, it is belied by a statistic indicating the current state of our world, that can only be called obscene: ‘the richest 225 people in the world have a net worth equivalent to the annual income of the poorest 2.5 billion people in the world’ (Money, March 2000, 30). There is considerable tax capacity in a world with such wealth without curtailing entrepreneurship.
26. The current global financial meltdown and bailout is causing an immense legitimation crisis for neoliberalism and reinforces my earlier arguments about the need for regulation and the fundamental problems of privatisation.