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

I often find myself criticizing governments worldwide for failing to create opportunities for poor people, especially in the education sector. We certainly should be critical, but must also realize that, as a responsible society, we cannot and should not leave everything to the government and NGOs. The education sector is not exclusively the obligation of the government. If the governments and NGOs cannot cope with the responsibility, then why shouldn?t the private sector do something to balance the lack of good education?

In many developing countries, public education leaves a lot to be desired. Teachers are not as motivated to show up regularly, perhaps because they do not feel accountable to the students, but instead to distant government officials. Public school teachers and their unions are sometimes politically divisive; the problems in Oaxaca, Mexico come to mind. On the other hand, the infrastructure of classrooms could be seriously improved; often the infrastructure is below the average standards of a respectful educative environment.Studies by the World Bank and The World Economic Forum have shown that entrepreneurs are realizing that there is a demand for private education services in the BOP. People in the BOP are also starting to “invest” in private education for their children. Derek Newberry and Seema Patel of NextBillion have blogged about this very issue before – on how there are new private schools in poor areas that charge $1 or $2 USD a month and provide better education.

Research done by Prof. James Tooley (winner of the FT Gold Prize Essay) shows that there are many people in the BOP who are willing to invest their money in private education. In the research of his award-winning essay, he found that “?a large majority of schoolchildren in selected poor urban and periurban areas of India and Sub-Saharan Africa using private schools, while in rural India, half of the schoolchildren are privately enrolled. Even in impoverished rural China large numbers of private schools exist off the official radar. The research showed that private schools for the poor are superior to government schoolteachers are more committed, the provision of important inputs are better, and education outcomes better even after controlling for background variables. All this is accomplished for a fraction of the per-pupil teacher cost of government schools.”

In the paper, “De facto? Privatisation of Education and the Poor: Implications of a Study from Sub-Saharan Africa and India,” James Tooley and Pauline Dixon make a case study in India on the extraordinary growth of private education. People living in the BOP are aware of the value of education as a long-term investment. Entrepreneurs that would want to invest in education should take this as an opportunity and not just leave the weight of education on the government or NGOs.

To private school standards, these schools are not necessarily top-tier schools, but in many cases give a better education than the public schools. I find these private education initiatives to be innovative ways of solving the problems of mediocre public education. These new initiatives give parents in developing countries an option to be able to assure better educational opportunities for their children.