The private school experiment in Liberia

In 2016, the Liberian government delegated management of 93 randomly selected public schools to private providers. Providers received US$50 per pupil, on top of US$50 per pupil annual expenditure in control schools. After one academic year, students in out-sourced schools scored 0.18 σ higher in English and mathematics. We do not find heterogeneity in learning gains or enrollment by student characteristics, but there is significant heterogeneity across providers. While outsourcing appears to be a cost-effective way to use new resources to improve test scores, some providers engaged in unforeseen and potentially harmful behavior, complicating any assessment of welfare gains.

That is by Mauricio Romero, Justin Sandefur, and Wayne Aaron Sandholtz in the new AER.  The gains are real, and not the result of student selection.  That said costs are higher with the private contracting.  Better partner selection would have improved the program greatly, though the authors note that some of the most promising partners ex ante ended up being the biggest troublemakers ex post.  Some of the schools, for instance, allowed a possibly unacceptable degree of sexual abuse of the students.  There is perhaps potential for dynamic reoptimization of permissible partners to yield very real gains, though this may or may not be supported by the available political economy incentives.

The authors suggest, by the way, that outsourcing or contracting out to the private sector often does better when quality is relatively simple, such as with water services, food distribution, and simple forms of primary health care, such as immunization.  In their view, for advanced health care and prisons, contracting is less effective, due to the vaguer nature of product quality.

This is in any case a very important paper, likely to be one of the best and most significant of the year.


"Some of the schools, for instance, allowed a possibly unacceptably degree of sexual abuse of the students."

You know this is a problematic sentence, right? It sounds like you think there's an acceptable degree.

I suppose the best possible way that could be interpreted is they aren't doing enough to prevent students from sexually abusing other students.

That's still not a good thing.

It has a minor adverb problem too - possible to an acceptable degree.

He wrote it. Cancel him.

Humorless cancel culture warriors are truly reducing the entertainment value of sustained public mockery.

Isn't the only 'acceptable degree of sexual abuse' zero?

Only if enforcement costs are zero.

So glad I live where no degree of sexual abuse of students is considered acceptable.

Not even in religious schools.

Imagine how things would turn out if parents could choose schools for their children. Wouldn't cost any government anything on net. Just some schools, like supermarkets or restaurants, would go down the tubes.

Imagine if schools could reject the few students who ruin the class for everyone.

Imagine how things would turn out if education was a search good rather than a credence good...

Since robots are taking away easily automated jobs, I wonder if tutoring/home schooling/private group schooling will continue to increase in prevalence.

There should be more people available to help tutor/coach kids to study, so maybe it becomes more acceptable to raise kids that way, instead of sending them to bad public schools or expensive private ones.

You and your 3 friends pool resources and hire a private tutor for all subjects for your 4 children of the same age. Has to be way less than private school tuition. The tutor uses all the online resources available and sets the agenda. Seems plausible. In the old days only the rich were educated, and mostly by private tutors.

I wonder if private prisons would work if inmates could choose between competing prisons?

Exactly. The worst abuses in prison do not depend on lack of money, but on a minimum interest on your clients. If you are a monopolist, your client is the government, and your care is almost zero, just enough to avoid to finish on newspapers’ first page with a fire or riot that kills tens of inmates.

But if the decisor (the client) is the inmate, you will easily implement some basic policies, with virtually no additional costs, to avoid the most despicable things happening in the prison, first all all violence, often sexual in nature.

I wonder if that could improve things. Would it increase or reduce recidivism.

You mean that the appalling violence in American prisons is deterring people from committing criminal activities?

Perhaps, although I doubt it. But assuming it does, the fact that a society uses the risk of being raped in a prison as a factor of deterrence would be pretty sad, in my opinion.

If prison weren't so rough, would it have ANY deterrent effect? Free room and board otherwise.

I recall reading about that Norwegian mass murderer complaining because he didn't have an advanced enough PlayStation in prison.

It's insane.

They went to all the trouble of randomizing the experiment, yet did not equalize the funding. They may have just found that $100 per student of funding produces better outcomes than $50 (which would not be surprising at all).

Why not also give the extra $50 to some randomly selected public schools? Then they could actually see the impact of private school provision--as well as measure the impact of the different funding level.

The existing public schools have some capital stock like land, buildings, and supplies, perhaps the difference is to make up for that?

There are *really* strong relationships with funding at the low bound:

So total funding level is probably quite important.

We could interpret this study as a "Maybe privatization helps net of funding increases help at the lower bounds; further research is needed".

But it would be a mistake to impute from this that there are large residuals from privatization in rich countries - we have large demographically and early achievement controlled studies of outcomes in developed countries and they show pretty much nothing. So it would be a bad idea to take this as evidence which overrules those.

I do not know enough on this study to express an opinion. It is especially important to know if the parents could choose to send the kid at the school they preferred or they were forced to send the kid to the school closer to their address.

Voucher it is not the best solution, but at least eliminates a monopoly. Simply outsourcing the service without allowing freedom of exit, is very marginally better than the usual government-produced dismal system

The best solution is simply to leave it at the market, without even the vouchers. In poor countries schooling is mostly provided by private schools. They are very cheap, a few dollars per month and compete vigorously. In general , you’ll find between 50% and 70% of kids in for-private schools, 20% in public schools, another 10-20% in schools run by the church or some other NGOs, and less than 20% out of school.

I guess for many people this sound new and difficult to believe, but it is pretty consistent in Africa, India, South-East-Asia and even in Latin America, although there is less pronounced because of the power of public teachers unions.

Just check this short TedTalk of Professor James Tooley:

Can I just ask, how is a "0.18 σ" change a (statistically) significant change?

This is a pretty large impact for an education impact evaluation. Matthew Kraft at Brown University looked at education impacts from nearly 750 randomized controlled trials and found that the median effect size was 0.1 standard deviations (SDs). This Liberia impact falls around the 70th percentile, so that's not small.

The subject of "education" is fraught because it's partly (mostly?) about indoctrination. In my time (the 1950s) conformity was highly valued; thus, we received a grade in what was euphemistically called "comportment"; disruption in those days was discouraged, with disruptors receiving failing grades in comportment. To be different was to be an outcast. Since I attended segregated schools, there wasn't all that much difference among classmates: all white and mostly middle class. Besides comportment, we also received a grade in what was called "citizenship", which is similar to comportment but with an emphasis on what one today would call "values". We learned that Communists (Russians and Chinese) lacked values, as did "agitators" such as civil rights protesters who wanted to be served at the "counter" at the local drug store (drug stores in those days had little restaurants called "counters" (no tables) where (white) customers sat on stools). In my town, the drug stores took out the "counters" rather than serve agitators. Anyone who has seen the film The Graduate will recall Mr. McCleery asking Benjamin if he is one of those "agitators". Today, parents are concerned that public schools aren't teaching children proper "values", many parents opting out of public schools in favor of either private schooling or home schooling where their children will be taught proper "values". Astute readers will observe that yesterday's conformists are today's agitators, and that yesterday's agitators are today's conformists. There's the expression "when the shoe is on the other foot", but it makes no sense to me because I have always put my left shoe on my left foot and my right shoe on my right foot. Anyone who would do otherwise deserves a failing grade in both comportment and citizenship, and should be sent to a school that teaches proper values.

"possibly unacceptable degree of sexual abuse" is truly a sentence that only an economist could love

Even an economist could not love sexual abuse. However, it does appear that an economist is unwilling to change the formulation, even after correcting a minor grammar slip.

TC "The gains are real"

The author's, "some providers engaged in unforeseen and potentially harmful behavior, complicating any assessment of welfare gains"

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