NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

?The accepted wisdom is wrong,? says James Tooley, winner of the FT’s recent essay contest, as he rips into the prevailing notion that developing country education problems can be solved with more aid. He continues his tirade, attacking development experts that on the one hand prioritize financial assistance for state education but on the other hand, acknowledge that benefits from this aid will have to wait until state education can be reformed and rid of corruption:

?It ignores the reality that poor parents are abandoning public schools en masse, to send their children to ?budget? private schools that charge low fees–perhaps one or two dollars per month, affordable even to parents on poverty-line wages.? Tooley hits upon a central element of the BOP hypothesis- that in cases where the government is unable to provide needed services to the poor, the private sector can and should step in.Usually, this refers to a case where the government literally has not accessed a rural area to provide drinking water, for example, but in this case the author speaks of entrepreneurs out-competing an inept system to provide education at an affordable cost. He calls for further innovations involving the financial community- investors teaming up with entrepreneurs to build chain schools, helping them to gain brand recognition and scale up.

Tooley’s critique rests mainly on the accusation that traditional development orgs like the World Bank are so wrapped up in national reform efforts that they wait too long for long-term solutions like anti-corruption programs while short-term solutions like better education are sidelined. I ironically ran across this commentary right after finding an article on the World Bank’s efforts to discourage corruption among beneficiary countries, to the point of holding back millions in financial assistance!

I think Tooley essentially delivers valid criticism, although it is important to keep in mind the World Bank’s perspective; if you know for a fact that a significant amount of your aid is being diverted or misallocated by corrupt practices, you have to take care of that problem first before you can expect to have successful development projects. One might argue that the World Bank’s mandate is to initiate development on the broadest level, and that solving smaller issues affecting individual communities should be the work of more locally oriented NGOs and bilaterals.

Additionally, while joining Tooley in applauding the entrepreneurs in Lagos and Hyderabad who are working to pick up the slack of the public sector, we shouldn?t mistake these schools as a long-term solution for the countries in which they operate. Karnani rightfully warns in his critique of the BOP hypothesis not to assume that just because a private enterprise has been able to fill a gap left by the government, the problem is solved and we can ignore the systemic issues of inefficiency within that government.

I, for one, believe that education should be a public good- while I support the fact that these private schools are providing it at a relatively affordable rate, the ultimate goal should be to get costs to zero to make it universally available. Only the government can provide this free service. The BOP schools are certainly doing good work, and they have their place in the education system as a stopgap measure and as a constant source of competition for public schools. But a solution that inevitably locks out the poorest of the poor who cannot even pay two dollars a month to send all of their children to school is not a long term solution.