At the secondary level, the performance of students from the Middle East and North Africa in international tests such as TIMS is significantly below the developing country average.
At the tertiary level, universities are chronically underfunded and not training students for jobs that the market is demanding - reminiscent of the Woody Allen line, "The food in this restaurant is terrible and the portions are too small."
All of these problems have a common root. Education is largely a private good. Most, if not all, the benefits of education accrue to the individual in terms of their being able to earn a higher wage as a result of being educated. I say "largely" a private good because we believe that there are also externalities associated with education, that society as a whole benefits from having a literate and numerate population. Unfortunately, the empirical evidence of these externalities is rather thin. (Most of the people who believe in the externality are university professors, which led Bob Lucas to remark that, if we were aluminum siding salesmen, we would claim that aluminum siding had externalities.) Even the empirical evidence suggests that the externality does not dwarf the private benefit from education. In short, education is more like food and clothing than like street lighting and national defense.
Yet, governments in developing countries assume education is a public good. They finance it out of public funds. In most cases, education is also provided by public sector employees. By ignoring the private-good element of education, governments have contributed to the problems with education. When teachers are paid by the government, they become accountable to the government, and not to the students or their parents. But if education is a private good, the provider should be accountable to the customer. This lack of accountability leads to teacher absenteeism. Parents, even poor ones, show that education is a private good by sending their kids to private schools, often bypassing the free public school nearby. In urban areas in Africa and South Asia, about half the children are now in private schools. In Punjab, Pakistan, parents in rural areas pay about $3 a month to give their children a private education. The large and pervasive phenomenon of tutoring in countries like Egypt is another demonstration of the private demand for quality education.
Worse, public teachers have become a lobby that tries to protect their rents in the system. In many countries, teachers run the election campaigns for local politicians who, when elected, give the teachers a job from which they can be absent. In Uttar Pradesh, India, about 20 percent of the state legislators are either current or former teachers. In Latin America, teachers have been known to protest attempts at improving learning outcomes by strengthening their accountability to the client.
The system seems to be stuck in a low-level equilibrium. Despite ASER's five years of testing and publicizing student learning outcomes in India, learning outcomes have been declining. In countries such as Sri Lanka that have succeeded in achieving high enrollment rates (something the public good model can deliver), it is difficult to shift to a private-good model to improve learning outcomes.
Note that the argument for public financing and provision of education is often made in terms of helping poor people. But it is the poor who are losing out on quality education. The rich will educate their children no matter what--because education is a private good.
The diagnosis of higher education is different because it costs about educating a student at university costs about 200 times what it costs at the primary level. When government provides higher education for free, it creates a huge rent (the different between private benefits and private costs) that is of interest to rich and poor alike. The rich are able to capture these rents by sending their kids to private secondary schools that prepare them to take exams to enter university. The result is that most university students come from the top quintile of the income distribution. In Africa, 47 percent come from the top decile.
Meanwhile, the quality of university education suffers because, when students don't pay, they are less demanding about what they learn (and there is less pressure to recoup the costs in the labor market). In fact, it can be worse, where in some countries, the universities become prey to political parties. Some years ago in Bangladesh, each political party had captured a different university.
Again, the system is resistant to change. Current students don't want to lose their rents. I once arrived in Dakar to give some lectures at the university only to discover that the students had gone on strike (they assured me it had nothing to do with my anticipated lectures). The issue was that the students would no longer have their own dorm room--they would have to share. The rector turned to me and said, "Shanta, you used to teach at Harvard, the richest university in the world. Do the students there have their own dorm rooms?" The answer was, for the most part, "no."
What can be done?
There are two ways to approach this sorry situation. The first, which I will call the "polite approach," is to continue pretending that education is a public good, and try to improve service delivery by strengthening accountability in the public sector. Efforts such as getting teachers to take date-stamped photographs with students in return for a bonus or hiring teachers on performance-based contracts are steps in this direction. Information campaigns about the importance of quality education could also make politicians more accountable to citizens. Some of these approaches have been shown to work in randomized control trials, but scaling up has been a challenge. In other cases, even the control trials have failed to produce results or even backfired.
The second, "less polite" approach is to acknowledge that education is a private good and regulate education markets. Like other markets, education markets have lots of distortions, including information asymmetries (parents don't know the quality of the school), some schools may have monopoly power, equity considerations, etc. By allowing private schools to develop by themselves, we have allowed these distortions to persist. Yet, we can regulate these markets. We could require private schools to register, and make information about their quality transparent. We can monitor and formalize private tutoring. And we should regulate the quality of private and public universities to prevent political capture.
By not acknowledging that education is a private good, we are in the worst of both worlds. Public education is failing, and so people are turning to private markets. But these markets are unregulated. And the losers, as usual, are the poor.