Tuesday, November 22, 2005


We were given this problem recently as part of an Operations Research assignment. Given a number of students; distance between schools in a neighbourhood, and an objective to maintain a certain level of racial balance, work out the optimal distances to be travelled by the students. Seems a decent problem only that it starts on a completely wrong note.

I had often wondered about the idea-divide between me and government officials in course of my policy research in Delhi, ostensibly when both of us want to do good. In reflection, the government (atleast the honest bureaucrat) tries to achieve welfare by the rules of optimisation. Given x money and y people, how do I fulfill z demands? If it employs rules it is only to achieve further fair division of the pie.

So when we had landline telephones being provided, the government thought of optimising the pie according to various factors: urban-rural; rich-poor; i knowu-idon'tknowu and the ilk. And then wireless came...an unforeseen market process, and the results are for everybody to see. I remember waiting for the virgin ring of the landline phone in my home on the 21st November 1992. Now none of us remember when we bought our cellphones last!

And you see the same optimisation game being tried out in the Right to Education Bill. This time the factors are: how to have a system of neighbourhood schools; the right salary for teachers; how to screen "bad" schools (licence permits); does food matter for students or does transport matter; does quality of teaching matter or is it schooling articles like blackboards; should I teach English or the mother language; is the curriculum overburdening and many more.

Governments ignore a powerful resource at their behest for increasing the size of the pie which is regulations. Instead, they concentrate on the actual production of goods because they see only the visible resources like money and people. So that makes them notch up a bill of 6 percent GDP for schooling India. If they could use rules which are usually not part of an optimisation process, they will find that they can generate so much more pie. Today there are rules galore that suppress the explosion of schooling. Number of schools in Delhi are decided 5 years in advance and you need a very expensive permit to open a school. There are minimum requirements for teacher salaries. You cannot make profit from a school and cannot plough funds from one school branch to another. Private boards cannot offer exams in India, ICSE is the only one which survived because of its minority status (am willing to be corrected if I am wrong on this). So if you are not part of a state or a national curriculum you cannot have your school affiliated, and hence cannot offer a valid Transfer Certificate.

And yet, you have a situation where for every increase of 100 children enrolled in urban India, 61 of them have been by private schools. In case of rural India, it is about 18.5. And these data are for the period 1986-1993, so the trend is arguably much higher now. Read the paper by Geeta Gandhi Kingdon here for a detailed analysis. Better, ask a government teacher where his/her children are studying!

The point is clear. The market process of private schoooling is rapidly gaining ground. However, the government, as usual, is blind to it and is still trying to optimise government resources and not incentivise private resources. Sooner or later this is what will happen. We will have private schooling for the rich only (if the government makes rules like 25% seat reservation for the poor and many other inhibiting rules) or private schools for all if the government deregulates the market for private schooling.

The government can do a decent job of rating these schools, ideas for which are provided here. Pratap Bhanu Mehta gives a good analysis of the Right to Education bill here but I guess he pulls punches to criticise it because he is trying too hard to think through all the various factors associated with schooling. Optimisation at the individual or organisation level doesn't work at the societal level. Ask Hayek!

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