Mark Harrison

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Education Matters Government, Markets and New
Zealand Schools
Hotel du Vin, Pokeno 21 February 2004
Mark Harrison
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The ideas of economists and political
philosophers, both when they are right and when
they are wrong, are more powerful than is
commonly understood Practical men, who believe
themselves to be quite exempt from any
intellectual influences, are usually the slaves
of some defunct economist It is ideas, not
vested interests, which are dangerous for good or
evil. - J. M. Keynes, General Theory
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Heroes and Influences

• Milton Friedman
• Thomas Sowell
• Edwin West
• Adam Smith
• Myron Lieberman
• James Tooley
• Chester Finn

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Objectives of Book

• Examine what economics and empirics say about the
  role of government in education
• Assess school sector performance, impact of
  current government policy, reforms of the
  1980s/90s and government education spending
• Examine how markets operate in education and why
  choice and competition would realise social
  objectives better than public provision
• Set out reform plan

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Key Points

• Current education system not best way to
• prepare children for happy and productive lives
• help the poor
• equalise opportunities
• increase equality
• protect children increase investment in children

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Key Points (Contd)

• reduce segregation by income, race and ability
• promote social cohesion and growth
• foster strong and cohesive communities
• protect and inform consumers
• teach the rights and duties of citizenship
• ensure all children receive an education
  necessary to participate in society regardless of
  family income

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Whats Wrong with Government Schools
Seven deadly sins of current politicised/
centralised system

• wastes resources
• discourages good teaching
• inhibits parental involvement
• suppresses information
• stifles innovation
• creates conflict
• harms the poor

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Whats Wrong with Government Schools

• Government monopoly over schooling
• Decisions are made through the political process
• Public schooling is inefficient
• Centralisation, unionisation and teacher quality

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Whats Wrong with Government Schools

• The unsatisfactory performance of the government
  school system affects the poor the most
• significant portion of students leave the school
  system poorly educated, lacking skills and
  unprepared for future life
• compulsory schooling does not ensure a minimum
  level of achievement

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Different Reform Approaches

• More resources
• Standards based reform
• Market reform

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Advantages of Markets

• Make use of decentralised knowledge
• Market allows autonomous decision-making by
  suppliers and maintains accountability
• Price signals provide information
• Markets allow for experimentation and diversity
• Competition ensures efficient production
• Profits reward entrepreneurship

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The Case for Market Competition

• Private schools are more efficient than state
  schools
• Private schools fix the problems with government
  schools
• A market system will benefit the poor
• Competition improves school performance

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Criticisms of Markets

• The criticisms of markets by the GESTABO
  (Government Education Sector Teacher
  Administrator Bureaucrat Organisations) include
• Education is too complex for markets to work
• Markets will destroy employment conditions for
  teachers
• There is no evidence for market policies in
  education

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Criticisms of Markets

• The market would only provide for the highest
  performing students
• schools too commercial
• The need to make profits would raise costs
• Private schools are not accountable
• An education market will not work because there
  will be too little entry

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Criticisms of Markets

• Private schools less likely than government
  schools to teach values with social benefits
• Markets are perfect and individuals are always
  rational and never mistaken
• Markets are about creating winners and losers
• Markets mean consumers order producers about
• Parental choice would reduce academic standards

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Criticisms of Markets

• Markets would help only the rich and harm the
  poor
• Markets destroy co-operation within schools
• Markets commodify education, create conflict
  and reduce social capital
• Markets increase segregation and reduce social
  cohesion

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Criticisms of Markets

• Solution to New Zealands educational problems is
  for the government to spend more on government
  schools
• Tomorrows Schools reforms illustrated failure
  of market approach
• Tomorrows Schools segregated schools,
  dramatically increased inequality and made
  children from poor families worse off

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Reform Plan Funding

• Government funding must be attached to the
  student, per-head funding
• Government financing should be neutral between
  different types of schools government,
  non-profit and for-profit
• Parents should be allowed to top up government
  funding
• A universal voucher

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Reform Plan Regulation

• Regulatory encroachment will government shackles
  follow government shekels?
• Regulation to protect children
• Curriculum regulation
• Supply side deregulation

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