Privatisation

2 An Economic View of the Effectiveness of Public and Private Schools David Beers and Jerry Ellig Recent years have seen an outpouring of public concern over the quality of primary and secondary education in the United States. A steady stream of reports from the nation's schools has documented a 25 percent national high school dropout rate, high proportions of high school graduates who are functionally illiterate, and three decades of falling test scores. Parents and community leaders have voiced outrage that the public schools are not only failing in their educational mission, but are increasingly becoming breeding grounds for drug abuse, violence, and crime. Many in the business world see the decline of primary and secondary education as a major factor behind the nation's eroding productive capacity and faltering competitive position in the world. Education officials at all levels have been accused of responding slowly at best to what many call a national crisis. During the decade since a landmark report by the Commission on Excellence in Education described American education as a "rising tide of mediocrity," few signs of improvement and many signs of further decline have materialized. Accusations notwithstand ing, public school leaders have overseen the implementation of many of the most persistently called-for proposals for school reform. The ever-present call for more funding has been met by tripling real per-pupil expenditures from their 1960 levels. The demand for greater teacher professionalism has motivated a 50 percent increase in average teacher salaries since 1960, adjusted for inflation. Class sizes have fallen by a third since the mid-1960s, and most states have continued to raise graduation requirements ( Myers 1990, 2). If the declining quality of public education continues, it is not wholly for lack of reform efforts. -19-

5 Public Schools by Contract: An Alternative to Privatization Paul T. Hill John Chubb and Terry Moe's critique ( 1990) of public education has caught on: even people who cannot accept their vision of a school system run by private entrepreneurs and funded by public vouchers agree that the problems they set out to solve--public schools' preoccupation with rule-following and tolerance of low performance--are real. Despite widespread agreement about what is wrong with public education, it is proving extremely hard to create a critical mass of support behind privatization or any other method of reform. Despite over ten years of ferment at federal, state, and local levels, the public school system continues as before, as a bureaucracy that tolerates innovation on the margins but isolates and destroys any changes in its fundamental ways of doing business. Recent experience validates the old political adage, "You can't beat something with nothing." Chubb and Moe are the only people to have proposed an alternative whole-systems concept, showing how large numbers of schools serving the whole public school population could be established, staffed, managed, evaluated, and improved, all without a large public service bureaucracy. Other current reform proposals, such as national standards and tests and radical new designs for individual schools, accept the principle of a bureaucratically run public education system. Even the charter schools concept, which would let groups of students and teachers "opt out" from the public school system, creates exceptions rather than reforming the system as a whole. In its purest form, privatization of schools means total private ownership and supervision. Private organizations would design and manage schools and be funded only through tuition paid by parents. Government would have no relationship with schools, except to provide vouchers or other forms of subsi -75-

Positive aspects of privatisation PRIVATE UNIVERSITIES, although new to India, exist in the U.S. from hundreds of years. Almost half of the 3,500 U.S. universities are private. They are managed and maintained either by the church, industry, or philanthropic organisations. The standard of education in them and the quality of research out-put vis-a-vis that of the state controlled universities is superior. The best universities (like MIT, Boston) are private. The U.S. has progressed well, and due share of credit goes to private universities. Many important inventions and innovations have taken place in them. Today, a larger proportion of patents and IPR are earned by private universities. The human civilisation would not have progressed so much, if there were no private universities in the world. All universities in India are state funded, and hence state controlled. Their performance is however far below the expectation. Neither the students nor the employers are happy. They are overcentralised, bureaucratic and monopolistic, thwarting the impending ideas of students and professors. They care only for their bosses, ignoring the needs of students and industry. They are far too behind their counterparts in the developed world. The organisational innovation like research parks, innovation centres, incubators, campus companies etc., which exist from almost 25 years in universities in advanced countries have not yet reached the Indian universities, which offer only irrelevant courses. Consequently, the educated unemployed are growing. They are six lakhs in Maharashtra alone. The competition in the Indian economy, although increasing is far too low, mainly because of mediocrity in State Universities. The students are still required to go to the U.S. and UK for higher studies. How long will they have to keep going? The answer lies in setting up private universities, and bringing competition to the state controlled universities. To cater for the rising demands in terms of quality and quantity in higher education, State Universities need to be supplemented by private universities. In the newly emerging knowledge society, the need and importance of efficiency in higher education needs no emphasis. The proportion of students taking to higher education in India was only 6 per cent but it is rising fast at the rate of 12 per cent per year. In the U.S. this proportion is 50 per cent, Korea has 38 per cent and Thailand 16 per cent. In this fast-paced globalisation, if India has to compete, the only option is to augment its private universities. This is the only way to get a competitive advantage. State universities are subordinate to the Government. They often play the tune of political masters, who keep changing. The case of astrology course being introduced in universities in an example. The Government which is elected for a short period, does not pay the required attention to higher education, which essentially demands long-range planning. Most of the times, the vicechancellors are appointed on political considerations. They bring politics in universities and the scholarship is driven out. Research is given a back seat. Private universities, if installed, will break the monopoly of the present universities, which is so essential for progress. Who will provide remedies to remove the weaknesses in state universities? Only private universities can come to its rescue. They can bring improved methods of work and capital investment from the world over especially from the NRI's. Any delay in such timely intervention would take away our huge education market to foreign universities. Autonomy to colleges is prescribed by the National Education Policy way back in 1986. But the recommendation is not

yet implemented. The Government is not willing to part with the powers and pass them to colleges. In private universities, there is no scope for political intervention. They keep pushing forward their academic missions and visions regardless of the political party that comes to power. The vice-chancellor is not appointed by the Government but by the university board. With a humanisticaim, they admit meritorious students from anywhere in the world. They bring about a cultural exchange between the nations and enrich the human civilisation. Most of the private universities abroad are reported to be making more productive utilisation of resources. They get donations, so much so that every year they start new research projects and new courses. Almost 50 per cent of the University's budget is met with donation and the remaining out of student fee. The fee prescribed by private universities in the U.S. is much higher. It is because they maintain a high standard of laboratories, library and education. They do not get financial aid from the Government. The students take loans from banks and get scholarships from philanthropic organisations. In India too, loans are now available for which the Government has allotted a said amount in its budget with the stipulated rules. In India, there are private self-finance colleges affiliated to state controlled universities. This is a case of partial privatisation, the final responsibility of quality rests with the university. Colleges, many times, tend to play mischief and follow unethical means to encourage students to copy in examinations and even buying degrees like the episode of the Nagpur university. This cannot happen in a private university, as it may stand the risk of closure. However, a fear prevails that the private universities may indulge in malpractice and sale of degrees. This has not happened in the U.S. or any where else. The system of controlling academic standards of the university, world over, has now changed to the scientific method of accreditation adopted nationally and internationally, besides ISO. As per the Bush commissions report (1945) ``Science - The Endless Frontier'' U.S. universities have been strengthened for research. They are primarily knowledge generation centres, where students learn best by researching. In this system quality of education is found to be the best, so also the research aspect. Cost wise, research subsidises education and education subsidises research. Institutions are granted status of university only if they have a proven ability of knowledge generation and not merely teaching. India will have to install such systems for innovation. There are associated risks, like in any good project, but the gains are tremendous. There are greater risks in not starting private universities. The private university bill was presented in Parliament in August 1995. It was passed by the Lok Sabha but unfortunately rejected by the Rajya Sabha. The Supreme Court has already given the green signal, and it is time to reintroduce the bill. To win in the global competition and to fulfil the rising aspirations of the people, India cannot afford to ignore the proven model of private universities.