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Euthanasing the public sector is not the answer


Sean Muller is currently a senior lecturer in economics at the University of Johannesburg, where he teaches microeconomics and industrial policy. Prior to this he worked at the Parliamentary Budget Office and at the University of Cape Town. He has a Master's and PhD in economics from UCT, and an MPhil Economics from Oxford. Among his broad academic interests, within and outside of economics, are a wide range of topics within applied microeconomics, philosophy of economics and public finance. He has been writing opinion pieces on a wide range of South African issues, particularly relating to public policy, for over a decade.

Public education may be struggling, but handing over responsibility to the private sector is no answer. The fix will come with better teacher training, something privatisation cannot address.  

One of the great ironies of modern South Africa is the combination of political rhetoric about government ‘intervention’ paired with an actual civil service that is, currently, not in a fit state to competently fulfil even the most traditional of roles, whether in national defence or the maintenance of law and order via the prevention and prosecution of crimes.

This environment gives a great deal of succour to extreme libertarian and corporatist views that would, rhetorically at least, do away with government altogether. I say ‘rhetorically’ because in fact many corporations and smaller private sector players benefit handsomely from government incompetence in the form of poorly drawn-up contracts, excessive payment for services, over-reliance on outside consultants and ineffective enforcement of regulation. 

This irony is compounded by an apparent lack of interest among those espousing the merits of the public sector in fixing the instrument that they intend to use. In this, our opportunist politicians and libertarian ideologues share something in common: no one wants to talk about improving the public sector. The former think it’s fine and the latter think it shouldn’t exist. That in turn is mirrored in a ‘national conversation’ which focuses on the many symptoms of a dysfunctional civil service but is satisfied with blaming these on whatever politician happens to be warming the ministerial chair at the time. 

The Mail and Guardian’s government ‘report card’ is a good example. While it is true that ministers usually have played some direct role in their departments’ failures—an incompetent or corrupt minister can destroy a good department surprisingly quickly—it is also true that even the best of ministers cannot achieve much if most of the civil servants are poorly qualified or corrupt.

It is in this context that one comes across arguments like those recently made by Paul Berkowitz. Berkowitz’s argument, ostensibly about education but really about ideology, can be summed up in a single quote: “There’s little chance of educational reform being undertaken from within government.… The solutions will have to come from the private sector”. In this single claim Berkowitz illustrates beautifully what the economist Thandika Mkandawire has called in a similar context, paraphrasing Antonio Gramsci, “the pessimism of the diagnosis and the optimism of the prescription”. 

As I try to emphasise to my public economics students, much as it is mistaken to assume that market failure necessarily implies a more successful role for the state (because the state can fail too) it is also mistaken to assume that state failure implies a successful role for markets. The best practical solution is likely to depend on the nature of the problem and the institutional context. 

With that in mind, history has important lessons for policy making. Conservative commentators never fail to remind us of this point in the case of Stalinism, but that cannot be a selective argument. If we are to learn from the terrible failures of combining planned economies with totalitarian leadership—as we should—it should also be the case that we learn from the actual role that the state has played in the successful development of other countries. This cannot happen if we are implicitly working with a super-imposed libertarian fantasy dressed-up as history. 

As often the case with issues in the social sciences, there is no consensus on the role of the state in historical development, but the Cambridge economist Hajoon Chang has made a strong case that in virtually all Western countries the state played a key role in economic growth. Furthermore, the state appears to have been even more crucial in planning and directing the development of the so-called Asian Tigers. It is likely that this holds more strongly in the context of education than other areas.

In that light, what are we to make of Berkowitz’s advocacy in the South African context of the fads in the United States and United Kingdom for privatising education through school vouchers and charter schools? First, we should note that the jury is out on the efficacy of these measures. Few rigorous studies are available, and the nature of the issue makes doing such studies extremely difficult. (Presumably this is why Berkowitz reports anecdotal claims such as ‘parents loved the idea’.) In the UK, various reports appear to suggest that charter schools may have received more state funding per student without being associated with significantly better outcomes. 

In the absence of any overwhelming evidence in favour of these approaches, and ample evidence that public education was adequate for growth and development far beyond what South Africa has yet achieved, what exactly is the case for adopting this type of policy? As far as I can see, the only reason to do so is if you hold an ideological position that desires a minimal state. Individuals are entitled to hold whatever social fantasies they choose, and in some cases these arise from a feeling of powerlessness and sincere frustration with existing institutions. But for those of us wanting real improvements in our lifetimes they are a cul de sac and we would do well to look for solutions elsewhere.

None of this is to question the characterisation of the problem, namely that South Africa’s basic education system is in mess. Many other commentators have elaborated on this at length. The issue really is about the solution. I suggest that the primary way of fixing the education system is to fix the civil service responsible for it. 

To illustrate this somewhat vague claim with a specific example, consider the problem of teacher quality. In my own view, partly informed by some of my PhD research, to the extent that one can isolate a single factor leading to the education crisis, the lack of teachers of adequate quality is arguably the primary obstacle to providing children in South Africa with a good education. In other words, you can build new schools, provide school meals, provide computers and make sure textbooks are delivered on time—all valuable improvements—but the average knowledge gained is unlikely to change very much without better teachers. (In this respect I am simply repeating a point expanded on at greater length by the education economist Eric Hanushek.) In most countries, the responsibility for training teachers vests in the public sector, emphasising the implausibility of ‘privatising education’.

As with too many non-educators, Berkowitz’s attitude to teachers is offensive. Rather than noting that much of Sadtu’s problematic behaviour arises from a desire to protect individuals who probably should never have been allowed to teach in the first place, he sets-up teachers per se as the enemy of good education. This is clearly farcical. By contrast, he tells us, parents are the heroes. That is more than a little ironic given that good teachers in developed and developing countries fairly often find themselves having to compensate for problems in the home, something which strictly speaking should not be their job. 

In this regard, I can hardly think of a single community in South Africa that comes close to being characterised by the scenarios Berkowitz paints. In those communities suffering most from poor quality public education it is hard to see how we could possibly rely on the resources, effort and discernment of parents as the main force holding schools accountable. And in the absence of such accountability, profit-maximising private sector providers will simply provide the lowest quality service the market will bear. 

One need only look at countries with weak regulation or enforcement of standards in the tertiary education sector to see the waste and exploitation that can result. Markets in education may work for the rich minority, but there is not much evidence that they work for the poor majority. The prospect of such markets is of course very appealing to private education providers who will profit regardless of the social outcomes.  

The answer to our education problems is not to take the rhetorically seductive route of trying to bypass the public sector. Besides the political infeasibility of this—why would transferring state teachers to private sector employers be any easier to get past Sadtu than introducing quality controls? —the practical difficulties are substantial and the likely rewards uncertain. We would also do well to remember that the public sector is required by law to deliver on a democratic and Constitutional mandate, but the same is not true of the private sector. 

Perhaps Berkowitz and other advocates of privatisation policies of this kind think government should regulate private sector education provision. Extensive research in the economics of regulation in developing countries has shown that in fact regulation can be a more difficult challenge for the public sector than direct provision (often for reasons relating to information asymmetries and the conflicting objectives of the private and public sectors). In short, asking government to regulate private providers may well be more demanding than asking it to provide education services itself. 

It is easy to take the relative competence of the civil service in other countries for granted, as if it is immutable. But a glance back into history reveals that the development of a skilled civil service in the US and UK, for example, required deliberate and sustained effort. The United States had a “Civil Service Reform Movement” in the late 19th century. What we need in South Africa is a movement of a similar kind that insists on high standards and proper planning in the civil service, rather than devoting our efforts to harebrained schemes with little historical or modern support. 

The proposed “market solution” to our education crisis is less a case of a pragmatic attempt at resolving the problem than a case of ideological wishful thinking. Most of the requirements for such a scheme to work—presence of enough competent teachers and principals, parental education and involvement, conducive community environment, weakened union power, proper enforcement of standards—would be enough to yield substantial improvements in public sector education outcomes. The market fantasy is an illusion, let’s get back to the real world and the less flashy process of making our democratic institutions work. DM


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