Private education as development strategy

I recently came across this article from Foreign Policy magazine about how private schools in poor countries will improve education outcomes for poor kids (and implicitly improve development outcomes for each country).  Even just after a first glance, a glaring error I see in the article's logic is that it cites poor school achievement in certain countries that it later shows have high rates of private school attendance (like India), and then somehow deducts that the prevalence of private schools is a response to, and not a cause of, low achievement.  It also led me to a similar article from last year, with a more balanced look at the debate over public vs. private education in developing countries. 

But more importantly, these two articles got me started thinking more about the relationship between education and economic development.  In a recent post on Ha-Joon Chang's book "23 things they don't tell you about capitalism", I remarked on his well-supported (and troubling for me, at first) claim that general education levels in a country have little impact on economic growth.  I now have to admit that I've more or less come around to accepting it, not because I've actually read all the academic sources that support the claim, but rather because it makes intuitive sense and coincides with my own anecdotal experience.

Think about it--the most-educated countries in our world today (countries in Europe, the US, and parts of East Asia) often have slower growth rates, because they happen to be mature economies.  On the other hand, high-growth countries in the developing world tend to have low levels of general education, again because their meteoric rise from poverty is based on industrial production and services that don't necessarily require a lot of formal education.  Education is obviously important for a number of reasons like exposing us to new ideas and ways of seeing the world, but rising education levels in prosperous countries seem to be more a result of economic growth, than a cause of it.  Economic growth may also allow a society to transition into higher-value economic sectors (computer manufacturing or pharmaceutical research vs. garment sewing, for instance).  This doesn't necessarily show up in economic growth rate, because if you've already gone from low levels of economic activity to medium levels through a basic industrial revolution, the subsequent growth into higher levels of gross economic activity may look like a relative slowdown from past performance, since you're starting from a higher baseline.  Because of this, I still feel that, though it may not have a direct impact on economic growth rate, increased education may indeed contribute to raising prosperity and improving living standards because of this role as a gateway into higher-value sectors.

So if we want to make the link between education and economic development at a countrywide level, it appears that education can't speed up economic growth per se, but it can improve living standards through non-economic factors like improved critical thinking, and it can perhaps lead to better economic wellbeing by favoring an entire society's transition into economic activities that pay more per man-hour. This last factor will mainly be relevant though if the society provides a similar education and similar access to such well-paying jobs for all its members. If not, you will create class divisions whereby some get education and good jobs, while others languish in low-paying jobs. This does not have a positive effect on the overall society's economic development.

In the worst case, education can have a more pernicious side, which is that it serves as a means of filtering out people for different jobs and the disparate incomes these jobs entail. In other words, better-educated people within a given society get better jobs. Sometimes this filtering role of education is logical, since a well-paid engineer really does need a lot of schooling to do her job, while a grocery bagger doesn't. But often this filtering is rather arbitrary--a high-level office manager doesn't necessarily need more general skills or years of schooling than her secretary does, since both are essentially just reading, writing, and processing the same information. In this case, the "good" education that the manager received didn't actually prepare her better, but only served as a means of justifying her getting a better-paying job than the secretary did. In this sense, education becomes an exclusionary force, a means of creating an entrenched class system couched in the modern vernacular of meritocracy. When this happens, education is an anti-development force, because it becomes a zero-sum game in which some win and some lose, but the society as a whole doesn't become better off.  Even in the example of the engineer, usually the difference between the engineer's being able to acquire the skills needed for his respectable job has less to do with any inherent merit on the future engineer's part, and more to do with the channels society has afforded him to access this schooling (his parents' income, the neighborhood he grew up in, the leisure and money to spend four or more adult years without a job while he studied, etc.).

This is a pretty grim picture if I'm right. The only way around the exclusionary effects of education is to really ensure a quality, uniform education for all people in a society. If you achieve this, education does indeed serve to enlighten and uplift the mind, to prepare everyone for a productive economic life, and to ensure the same basic opportunities to everyone. This appears to be what Finland has done, and in the process it is by many measures the world's best school system. I don't see any way of doing this except through a nationalized public school system, where funding and teaching and content don't depend on the local tax base. Even if you implemented such a system in the US, and probably in many developing countries, it might not be totally effective, because the existing gross economic inequalities between classes and races and geographic areas mean that different parents don't always have the same tools to support and reinforce their kids' learning outside of school.

What I am sure of though is that private education will never contribute to a society's aggregate development.  If you create a differentiated "market" of schools, with some (private) schools gaining more prestige than others (whether or not they really are of better quality), then the "better" schools are better mainly because they are elite, which is to say because not everyone can attend them.  Their cache is their exclusivity, their ability to bring in the most privileged kids and keep out those less fortunate kids who would drag down their test scores or other measures of prestige.  Even giving vouchers to a few underprivileged people so they can access such a school may improve their own personal education and economic outcomes, but it can't be the solution for improving nationwide education levels.  If the only way out of poverty that a society offers is by stepping on other poor people to lift yourself up, there is no hope of the society as a whole becoming developed and prosperous.  If not all underprivileged people can attend the select few elite schools, then the very existence of such schools, not to mention the generalized privatization of all schools, will always be inherently exclusionary.  The only way a privatized school system would work to improve a society's overall wellbeing is if there were just one private school company offering a chain of uniform, standardized schools to all students of all backgrounds.  At which point of course it would be more efficient to just have a well-run public system than a private monopoly that aims to draw a profit in addition to whatever costs it incurs.

Here is a much more informed writer that basically agrees with my argument.