Education: The Role of the Private Sector

Getting Involved: An Opinion

by | May 8, 2007

Students learn to work on computers, sponsored by a telephone company foundation. Photo courtesy of Fundação Telefônica

I remember walking into the room for my last interview for the scholarship from Fundação Estudar. As soon as the other five candidates and I found our assigned seats, we realized that our interviewers were among some of the most prominent business leaders in Brazil: Jorge Paulo Lemann, Carlos Alberto Sicupira, and Marcel Telles. There was nothing about that last round that made us feel comfortable, even after having grown accustomed to the rigorous three-month-long selection process. I felt particularly different from the exclusively MBA and LLM candidates—I was going to study International Education Policy. I wondered what motivated these executives to give up their valuable working hours to meet us and choose who they believed would be the most qualified individuals for the graduate scholarship and to be part of the Fundação Estudar network. As they shot off questions, tensions slowly eased. I understood immediately how important it was for them to be there. They were in fact devoting time to select potentially some of the future leaders of several sectors of the economy in Brazil. They would give the opportunity to study at the most prominent institutions in the world to those who, besides having displayed academic and professional success, were committed to returning to Brazil and making positive contributions. After being selected, for me that day meant that they were investing in someone who had the desire to improve the education system in Brazil. I understood, then and there, that funding university students is one of the means the private sector has to contribute to education.

Why should we care about education? Simply put, education is the resource that drives our knowledge-based society. The ability of individuals and nations to create wealth is positively related to the quality of the education available. Therefore, generating human capital is key to fostering economic growth in any nation. It should be an absolute priority considering the competition among developing countries.

We have already reached high levels of attendance in primary schools in Brazil: approximately ninety-seven percent of children are enrolled. The greatest challenge now lies in improving the quality of education in these schools. While it is quite easy to recommend spending more public funds, it is harder to ensure that extra funding will indeed generate systemic results. I believe that the misallocation of funds for primary education, the lack of evaluative measures with which to hold schools accountable, and inefficient school management are the main obstacles to attaining high quality education. The private sector could be instrumental in reshaping the education system by bringing in managerial expertise.

After spending this last semester studying the education systems of developing countries under some brilliant educators, such as Fernando Reimers, I understand that to really improve the quality of education Brazil needs an entirely different system. Instead of fiddling with what we currently have, we need a dramatic shift in the way schools are organized—which is where the private sector comes into play. Education entrepreneurs could respond to the demand by creating more accomplished private education systems than those of the public sector, and at the same, at a lower cost for students.

Thus, I propose that the primary and secondary public school system be progressively outsourced to the private sector. Allowing for the existence of private schools and giving school vouchers to parents are examples of policies that encourage freedom of choice, and thereby enhancing competition in the education market. Giving families the option to choose schools will drive innovation, improve academic quality, and increase managerial efficiency, as exemplified by the charter school model in the United States. Charter schools are nonsectarian public schools run by private organizations. They are given full autonomy and are held accountable for performance by parents in the community and their funding bodies. A study by Hoxby (2004) lays out the evidence that charter school students outperform traditional public school students by an average 5.2 percent proficiency in reading and 3.2 percent proficiency in math on standardized state exams. Furthermore, driven by competitive markets, poorly managed charter schools simply go out of business since parents, as consumers, have a choice of sending their kids to higher performing schools. I infer from this analysis that charter schools are a better option for ensuring quality education over the regular public system. Another revealing example is Chile, a developing country that has implemented the voucher system, through which private schools receive public money for each student enrolled. Recent literature by Gallego (2006) shows that, largely due to market forces, voucher school competition in Chile has indeed increased educational outcomes, in both public and private schools.

In Brazil, as in many other Latin American countries, access to high quality primary and secondary education is only available to those who can afford it. Consequently, admissions to public universities, which are free of charge, remain a privilege for the elite. The poorest portion of the population, those who are most in need, must resort to low-quality private schools because they lack the training for higher scores on national entrance exams and yet still compete for the same spots as students from elite private schools. One of the problems is that national public expenditure on higher education represents over 50 percent of the total allocated to education, currently at about five percent of GDP. This misallocation prevents the provision of quality primary education. If we do not urgently change the way primary schooling is organized, the poor will remain trapped in poverty.

I suggest that public-private partnerships in education reforms happen progressively for a few reasons. First, there is a tendency for elected officials to assume power and depart entirely from the political agenda of their predecessor, often as proof of getting real work done. This is counterproductive, as policies do not have a chance to prove themselves. If such models can indeed be proven successful on a smaller scale in the beginning, then reform can be implemented in the longterm. Moreover, it allows time for school leaders and teachers to adjust to the new system, particularly by offering professional development programs. Finally, it would allow for the implementation of monitoring and evaluation systems, and schools would be held accountable for their performance.

The private sector is also very capable of promoting social and business networking. That is yet another fantastic opportunity provided by Fundação Estudar: the network of people from different professional fields that come together to share and trade information. By keeping track of its members throughout the years, they can see which kinds of workshops and career development plans are necessary in order to help us succeed. Schools could do the same. By following the careers of their graduates, school managers and teachers can use that information to shape curriculum planning. The idea of alumni networks is still incipient or nonexistent in Brazilian schools.

After my acceptance into the Masters program, I was advised by the David Rockefeller Center for Latin American Studies to apply to a newly established scholarship made possible through the generous donation of Jorge Paulo Lemann, an alumnus of the college. The Lemann Fellows were either Brazilians or students interested in studying Brazil. However, the most important aspect of this scholarship was that it would be exclusively for those pursuing public service careers at the Graduate School of Education, the School of Public Health, or the Kennedy School of Government. This marked a big change in the perception of which careers should be valued and encouraged in Brazil. Instead of focusing solely on business and law, the Lemann Scholarship now gives an opportunity to people who would otherwise not even contemplate studying at a university like Harvard for lack of financial resources, in careers that would formerly be considered as less important to the development of a nation.

Governments should encourage policies that make it attractive for the private sector to participate actively in education. They could do so by creating innovative and financially viable projects to improve the quality of education in Brazil. Through public-private partnerships it is possible to structure sustainable business models for the establishment of new schools and universities, as well as to efficiently redesign malfunctioning institutions. In this new system, we would be able to promote affordable access to education, use technology in creative ways to reduce costs, institutionalize the professional management of funds and resources, and develop inventive global partnerships to offer local education solutions.

Spring 2007Volume VI, Number 3

Ana Gabriela M. Pessoa is a M.Ed 2007 candidate in International Education Policy at the Graduate School of Education. She previously worked with higher education in Brazil. She has a B.A. in Politics, Philosophy, Economics from the University of Pennsylvania. She is currently a Jorge Paulo Lemann Fellow.

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