MARKET ORIENTED POLICIES FOR OUR EDUCATIONAL SECTOR:

This is the first of a series of articles intended to motivate serious discussion in theDominican Republic about the need to transform our educational policy towards one thatwill stimulate competition, flexible curriculums, innovation and academic achievement by students through the performance of the entire academic body.

It is an undeniable secret that in our country the Public Educational Sector is in shambles.The statistics are staggering. To mention just a few in order to illustrate this fact: 80% of those enrolled in first grade will not make it through 8th grade, Pre-school coverage isinsignificant, High School graduates do not meet even the most basic math and grammar requirements. These poor levels of performance have the subsequent problem that they pull all “Private Endeavors” down, so that Private Schools have no immediate basis for strong competition.

We need to move towards a system that will increase: coverage, labor flexibility, entry of new professionals into the teaching and school management positions and above all thatwill decentralize the system so as to better serve the innate cognitive requirements of small and large social conclaves. There are two basic mechanisms which can be utilizedin order to achieve such objectives, and both assume the undeniable fact that marketoriented institutions are more productive and conducive to progress than publicly runentities. These are the Voucher and the Charter Schools Mechanisms. These two systemsare not mutually exclusive of one another but we will treat them separately for the time being.

In this article we will concentrate mainly on the first and will leave the latter for a followup presentation. The Voucher Mechanism to the allocation of students within a PubliclyRun school system was first suggested by Milton Friedman 1 and consists in the States (inour case the Educational Ministry, “Secretaría de Estado de Eduación”), providing aredeemable IOU directly to the family and letting them decide to which school to taketheir child. In Friedman’s words, “The most feasible way to bring about such a transfer from government to private enterprise is to enact in each state a voucher system thatenables parents to choose freely the schools their children attend. The voucher must beuniversal, available to all parents, and large enough to cover the costs of a high-qualityeducation. No conditions should be attached to vouchers that interfere with the freedomof private enterprises to experiment, to explore, and to innovate.”

Most authors including Friedman acknowledge that the Vouchers will not solve by itself the problems but it’s an ideal mechanism to promote private ingenuity and achievementwithin the Public School System. As we speak the Dominican Government although it isis spending the second to lowest ratio in the American Continent on Public Education,around RD$460.00 a month per student (which is equivalent to 2.3% of our CurrentGDP) at the same time more than 80% (more than 16% of all students between Pre-School and High School levels) of all privately run schools charge less than RD$500.00.This reflects two immediate problems, the low level of public investment is providing no

1 Public Schools Make them Private. Friedman, Milton. Cato Institute Briefing Paper No. 23, June 1995

 

stimulus for private competition, this in turn creates an investment trap that does notallow consolidation within the sector and keeps small inefficient private schoolsoperating since there are no true incentives to improve, hence invest, in the quality of theservice provided. The second thing it reveals is that in the Dominican Republic due to thelack of an acceptable Public School system low income families send their children tocomparable Private Schools in order to guarantee a minimum of instruction.

There are multiple forms in which a Voucher System can be applied, and the literature init is each day more extensive. Authors such as Thomas J. Nechyba have demonstratedthat a “Targeted Private School Voucher System” also improves the quality of instructionand improves on Income Distribution issues within the population.2 So that even if theseVouchers where targeted for use within the Private School System they would greatlyimprove the conditions of the Private Schools and the quality of the instruction theycurrently offer.

 Now an immediate question comes to mind and its: If the Voucher System has so manyimmediate and long term advantages why have Developed Market Oriented Nations likethe US adopted this system and a broader basis. The answer is that although manyattempts have been made with minor exceptions (such as the case of Green Bay,Wisconsin), no one has succeeded in getting a voucher system adopted, thanks primarilyto the political power of the school establishment, more recently reinforced by the National Education Association and the  American Federation of Teachers, together thestrongest political lobbying body in the United States.

In our country projects such as this one will surely confront severe opposition by theTeachers Union (ADP) and by many political sectors within the SEE . This is why our suggestion is that this program be started with a few specific school Districts and under direct supervision from a multilateral organism in order to control outside damaging pressures.

For this the SEE could take advantage of The National Census, which is currently beingorganized in order to use this information to transform the Educational Sector,decentralizing the educational operation and giving cities and provinces the opportunityto manage their own educational horizon. As families are provided with the option todecide which school provides the better service, intelligent choices will be made and thegeneral public will be more informed and willing to participate in the transformation of the Educational Sector. ……to be continued..

2 Thomas J. Nechyba, A Model of Multiple Districts and Private Schools: The Role of Mobility,

Targeting, and Private School Vouchers. NBER Working Paper 7239, Issued in July 1999.