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Fund Children; not Schools

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The most striking lesson for India is from Sweden’s education reforms in the early 1990s. Sweden has decentralised its system - shifting the control of schools from the centre to municipalities - and has given parents a choice whether to send their children to state or private schools (but paid by the state with a voucher). As a result, many innovative, for-profit schools have opened up who compete for vouchers. The number of students in private schools has gone up ten fold, from less than one to over 10%.

Scandinavia combines the best in socialism and capitalism. It has the most caring governments - providing cradle to grave security for its citizens. It has also become amongst the best places in the world to do business. It takes only a day to start a business and a day to close it. You can hire and fire workers with ease. They have cut red tape ruthlessly, almost wiping out bureaucratic corruption. Scandinavia, today, is the envy of the world with the highest living standards combined with the best social welfare.

One of the most successful is a chain of 30 private schools, which encourages children to learn in small groups and lets them progress at their own speed. Children spend 15 minutes each week with a tutor, reviewing last week’s progress, and deciding on next week’s goals. This information goes up on the website for parents’ review. Successful teachers earn bonuses based on the children’s performance. Nearly 90% of the parents stated in a recent survey that ‘‘school choice’’ and competition have improved the overall quality of education. The poorest are the happiest, for their children can now go to the best schools for free. The ability to exit a bad school gives a poor child the same chance as a rich one to rise in the world.

Although Sweden is tiny compared to India, its school model is worth trying - at least in a few of our cities. Our government schools have failed, teacher absenteeism is rampant, and there is no accountability. As a result, even the poor are withdrawing their kids from government schools and putting them in cheap private schools (that charge Rs 100-200 per month). If any Indian politician were to advocate Sweden’s model - fund children, don’t fund schools - parents would be so grateful that the politician would never lose his seat. The supply of good schools would increase, the poorest child would have the same opportunity as one from the middle class, and government schools would improve because teachers’ salaries would be paid by parents’ vouchers. It would be a Diwali everyday!

Government budgets in Sweden have not been hurt by having to finance children in private schools because municipalities have managed to close or cut expenses of the poorer performing government schools. Nor do Social Democrat politicians dare to criticise what is clearly popular with voters. Sweden’s school reforms are a good example of what is attractive about the Scandinavian model.

It has its own problems, but unlike India, it is not riddled with red tape, nor hostile to private enterprise. It gives the state an important role in setting a socially responsible context within which private enterprise flourishes. In the case of schools, the Swedish government provides the resources and sets some basic guidelines, and then lets the private sector go to work. It is a public-private partnership made for India.

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