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Socialist Vouchers for Education!!!

Education, Vouchers


Post independence India was characterized by socialistic ideology and has gradually transformed into a country which even after implementing liberalization reforms in the year 1991 is still averse to free market principles and capitalist economy. Western liberalism has not found its place in China as well mainly due to the repression by Communist Party. Hence, both the countries are devoid of any particular ideology per se. However, China is not clueless as India is! China has one earnest goal of “economic growth and development” and a dedicated path to achieve it even if it has to camouflage free market principles to suit its (assumed) socialist ideology! How?

In the year 1955, Milton Friedman in his essay “The Role of Government in Education” proposed the idea of a voucher for school choice to parents such that governments could finance education by making public funds available to private schools so that everyone has access to the latter.

On May 10, 2001, the Education Bureau of Changxing County announced the beginning of the implementation of the first education voucher system in China, thus adapting the system developed by Milton Friedman.  Four different kinds of education vouchers were issued: Civilian-run School Vouchers (worth 500 yuan (U.S. $65)), Vocational Education Vouchers (300 yuan (U.S. $39)), Poor Student’s Vouchers (200-300 yuan (U.S. $25-$39)), and Education Vouchers for Rural Skills Training. Changxing has issued 72 Civilian-run School Vouchers, 8,743 Poor Student Vouchers, 15,818 Vocational Education Vouchers, 787 Education Vouchers for civilian-run senior high schools, 624 Education Vouchers for ordinary high schools, and 11,150 Education Vouchers for Rural Skills Training.

Yes, the very policy tool which anyone would think to be the last thing that will be implemented by an authoritarian socialist country and an obvious tool a democratic andpresumably economically free country like India is expected to implement. However, expectations are not always met quite the desired way!

China has camouflaged this free market instrument in the following intriguing way.

  • China believes that vouchers mix equity with efficiency-”Priority to efficiency with due consideration to fairness” has been the main guiding principle for propagating choice.
  • Vouchers are deemed to provide for an effective financial resource scheme for the government as it is believed to reduce trade costs in processing of education funds.
  • Most fascinatingly, vouchers are deemed to facilitate exchange of property rights such that every citizen gets an equal right over public education funds for everyone is a taxpayer. This necessitates the government to subsidise private schools on people’s demand for choice. This is more like people spending their own money.
  • One more dimension that is persuasive to socialist thinking but which might not be ideal is that vouchers convert private schools into a new kind of “public” institutions such that government’s role now becomes that of “steering rather than rowing”. Hence the sacrosanct status awarded to public institutions might be spilled over to private entities as well.

Milton Friedman’s soul might be perplexed but must be happy!

China has adapted to what is needed for its development and has gone much ahead in the race while India still lives in oblivion by assuming that it is competing. However, the truth is that India does not even know how to compete.

This was originally posted on Spontaneous Order.

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