EdInvest News

December 2003

Copyright © World Bank Group, 2003. All Rights Reserved.

http://www.worldbank.org/edinvest

Facilitating Investment in the Global Education Market

In this Issue: This month's newsletter is the second in a series which will focus on the topic of vouchers and school choice around the world.

We are honored to be producing this series in collaboration with NCSPE (National Center for the Study of Privatization in Education) at Teachers College, Columbia University. NCSPE provides independent, non-partisan information on and analysis of privatization in education. Visit their website at:

http://www.ncspe.org/

The December issue focuses on school choice in the Netherlands and Denmark and was produced by EdInvest. In January we will turn our attention to developing countries.

THE NETHERLANDS

The Netherlands is one of only two countries in the world with a universal school choice system, which is guaranteed under Article 23 of the Constitution. This Article allows parents to choose any school in the country for their children as there are no catchment areas or other restrictions. In fact, eighty-six percent of parents choose schools of their own preference, based upon religion, philosophy and pedagogy. Alternatively, a group of parents can establish their own school.

In fact the majority of the children attend private schools - approximately seventy percent at the primary level and seventy-five percent at the secondary level - and this number is increasing. These schools can be run by an association, foundation or church and are managed by school boards. Most schools have a religious affiliation (many are Roman Catholic or Protestant) and there are also private schools that are founded on specific education principals.

Access

Private schools can impose criteria for admission, usually when there is limited capacity or if the applicants do not subscribe to the religious principles of a confessional school. Most schools, however, have non-restrictive admissions policies and there is no significant elite school sector.

Quality

The Netherlands has been able to provide high quality education while keeping education spending low. It ranks highly in international academic achievement tests such as the Third International Mathematics and Science Study (TIMSS), scoring near the top in both subjects, while spending only 4.6 percent of its GDP on education compared to the OECD average of 5.8 percent. Although this low unit cost has still enabled the country to maintain healthy student/ faculty ratios of approximately. 20:1 for ages 4 to 7 and 27.9:1 for older primary students.

School quality and teaching methods are monitored by the Education Inspectorate which employs 200 inspectors who make over 10,000 school visits per year. Their findings are submitted annually to the Minister of Education, Culture and Science, the State Secretaries and Parliament. The general public has access to the results through the daily newspaper Trouw which publishes the results and through school report cards available online (www.owinsp.nl). Catholic schools perform much better than public schools, and in general, private religious schools (in particular Catholic and Protestant) consistently receive high rankings in quality. Schools which receive a poor rating from the Inspectorate can be issued a warning and action can be taken over by the Ministry if quality does not improve.

In order to ensure combat inequality of access, the Government has several funding mechanisms in place. Primary schools receive more funding for students from underprivileged families and additional funding is provided for schools in districts and regions with high numbers of such families . Also, additional staff will be funded if a school has a large number of underprivileged students. Schools receive additional funding for minority students and native children from disadvantaged backgrounds.

Finance

Education in the Netherlands is free and compulsory for the first ten years. However, parents contribute towards supplies, outings and textbooks. In addition, schools may ask parental funding for certain activities, and this is voluntary. If the parents do not contribute, the child may be excluded from the activity but cannot be denied admission to the school. Once a student is admitted, the school and parents sign a contract outlining how the parental contribution will be spent and the consequences if thepayment is not forthcoming. The amount of the contribution varies, but is always a very small source of revenue. Private schools usually ask for a higher fee than public schools, which can range from five dollars to several thousand dollars in certain instances.

Schools receive the per capita cost of public schooling for each child enrolled, providing that they are nonprofit, although they are permitted to retain surplus earnings. For-profit schools do exist and but they capture less than one percent of the total enrollments. With such a small enrollment, they do not qualify to receive government funding.

Central government provides most of the start-up costs for schools as well as paying for the recurrent operating costs. It covers the cost of teacher salaries and staffing and other expenses at the primary level. Municipalities cover the costs of infrastructure and minority language instruction and teacher salaries and building costs at the secondary level. The amount for building and operating costs are set by each municipality and all public and private schools receive the same amount.

Lump sum financing is now common in secondary education and in 2004 this will apply to primary schools are well. This system will grant additional financial discretion to the schools. There are fewer regulations, increased responsibility and budgets can be reallocated. Schools must continue to adhere to the prescribed employment laws, teacher qualifications, pay and conditions and building standards.

Regulation and Administration

Education policy for both public and private schools is centralized. The Ministry of Education, Culture and Science dictates the subjects to be taught, the attainment targets and the content of national examinations, as well as rules concerning the number of teaching periods per year, teacher training and qualifications, the rights of parents and children to participate in school matters, and planning and reporting requirements. The local school boards are responsible for implementing legislation and regulations in all schools. Schools do have considerable freedom in textbook selection and instructional materials and in internal management. To establish a new school, a proposal from interested parents is required. The exact number the parents is determined by population density. To start a new school in The Hague for example, 337 parents are required.

There are coordinating organizations for both Catholic and Protestant schools. They are recognized by the Government and receive public funds. They are not involved in establishing schools but can, for example, be involved in consultations with the authorities and unions, mediating conflicts and providing information and training. Another association, VVO (Vereniging voor het management in het Voortgezet Onderwijs) represents about 95% of all secondary schools, about 560 school management teams. It attempts to influence national education policy and support its members in school management.

DENMARK

Denmark has a long tradition of school choice. The right to provide for a child's education without the approval of the state was established by law in 1855 and enshrined in the constitution in 1915. From 1899, Denmark's "free" (private) schools have received state subsidies. In the 1960s, various progressive schools emerged in urban areas, and private schools grew in popularity during the 1980s, rising from 8 percent of enrollments in 1982-83 to 12 percent in 1998. Private school attendance has continued to climb, rising by 12.6 percent in the past ten years in comparison to an increase of 0.4 percent in state school attendance. Since 1990, 159 state schools have closed while in the same period 49 private schools have been established.

Access

Students are free to attend any school they choose. If the municipal school does not provide what the student is looking for, then they have the right under the Danish Education Act to attend a private school, for which the state will provide 80-85 percent funding. Parents must contribute the remaining tuition. If they wish, any group of parents can declare themselves as a private school and claim public funding so long as they have at least 28 students. According to the OECD, the Danish system does not create a segregated system or lower standards.

Quality

The Danish Evaluation Institute (EVA) is an external, independent body for quality assurance and the development of Danish education and instruction. The EVA's task is to evaluate education and instruction, with a limited focus on the evaluation of institutions and the way these institutions are run. In addition, EVA develops methods of evaluation and puts this expertise at the disposal of institutions. The institute's evaluation reports are public documents.

In May 2002, legislation was passed with the goal to improve access to information on education and institutions, thus enabling individuals to make an informed choice of education and school/institution. All institutions must now have a website with information about their educational provisions, teaching principles and grade averages for individual subjects and levels. In addition, institutions are required to publish evaluations of instruction and all information deemed relevant for an assessment of the quality of the instruction provided.

The OECD ranks Denmark at the high end of the scale regarding young people's aptitude to complete high school and other youth education programs. While 82 percent of any given OECD generation graduates from high school or another youth training program, the Danish completion rate is ninety-six percent.

Finance

During the 1990s, the centralized state financial and administrative management system was gradually replaced by a grant-based system. This taximeter system allows institutions more control over financial and administrative affairs. There are four elements of grants: (1) a basic grant; (2) a teaching grant; (3) an operational grant; and (4) a building grant. The building grant is a lump sum grant, which covers rent and operating expenses. The other three grants are determined by student enrollment, age distribution of students and the seniority of teachers.

The Danish Ministry of Education sees this system as being demand–driven and result-oriented, forcing institutions to behave in a more economically rational manner. Also, the administration of the country's 1,300 institutions has become more straightforward. Education provision remains costly, however. The OECD ranks Denmark has having the world's fifth-most expensive school system in the OECD zone, surpassed only by Austria, Switzerland, Norway and the USA.

Regulation and Administration

Private schools must be governed by a board elected by parents, who can appoint an inspector if standards are considered unsatisfactory. Private schools must be non-profit and cannot be privately owned by individuals nor can they be run by corporations. Private schools must be established with their own funds and buildings, and only then can they become eligible for state funds. Denmark has a wide variety of private schools, including independent rural schools, religious schools, German minority schools and immigrant schools (for example Muslim schools). Unlike other countries that allow private education, religious schools do not predominate.

Education is compulsory up to the ninth or tenth year and it is a municipal responsibility. Each municipal school has a board comprised of parents, students, teachers and the headmaster, all of whom are elected by the parents. Although the Ministry of Education publishes curriculum guidelines, guidelines, schools are free to set their own within these aims and proficiency areas, albeit following closely to the guidelines. In addition, the supply of certain courses is subject to government control to ensure a minimum of geographical variation. The salaries and work conditions of the teachers are mostly determined by national collective bargaining, although a more flexible remuneration system is gradually being implemented in the public sector.

Articles of Interest

British Prime Minister Tony Blair proposes more than doubling the comparatively low tuition that British students pay, a move Blair says is "absolutely central to the future of Britain." Compared to the fees paid by American students, the fee Blair proposed is low, at the equivalent of $5,100 per year, up from a current level of about $1,900. This amount would be paid only by students in the upper income brackets, and only when they graduated and were in jobs earning more than $25,000 per year. Blair sees the increase as key to his plan increasing higher education access. His opponents argue that increased fees will price poor students out of the market and ultimately create a multitiered system in which only the wealthiest students will be able to afford the best universities. See the story by Glenn Frankel in the Washington Post at:

http://www.washingtonpost.com/wp-dyn/articles/A16413-2003Dec19_2.html

The Times Higher Education Supplement writes that for-profit universities in the U.S are booming, with enrolments increasing almost 48 per cent between 1996 and 2000. They appeal to the distance-learning market and those who are in-between jobs or who must juggle work with childcare and other commitments and are looking for evening classes at local sites. Observers in the U.S. are concerned that these commercial upstarts will corner the market of courses such as business and education and will debase the currency of qualifications. See the entire article by Stephen Phillips online at:
http://www.thes.co.uk/current_edition/story.aspx?story_id=2007730

A recent Washington Post article reports on the popularity of an executive MBA program run jointly by the Chinese government and the W.P. Carey School of Business at Arizona State University. The program, which began this fall, will confer to executives who attend two dozen weekend sessions spread over two years. Professors from several American institutions, including MIT's Sloan School of Management and the Stern School of Business at New York University will travel to China to teach the courses. The two-year program costs $20,000, however many of the students have had their fees paid by their companies or the government. See the entire story online at:http://www.washingtonpost.com/wp-dyn/articles/A17482-2003Nov27_3.html

The Wall Street Journal reports on how Chinese parents are preparing their children to compete in a new China that doesn't offer the safety nets that they grew up with. With only 14% of 18- to 22-year-olds attending college, parents who can afford it are sending their children to private schools and enrolling them in afterhours classes in order to increase their chances of admission to college. See the article by Leslie Chang at
http://online.wsj.com/public/us

While the economic crash in South East Asian countries did not education very severely, the leaders of these countries are afraid that their countries will lose out on foreign investment and economic growth unless they produce more skilled workers. To prevent this, they want to improve the quality of teaching and keep children in school longer. Thailand, for example, has just extended compulsory public schooling from nine to 12 years and is considering providing up to 15 years' free education. Malaysia is targeting 40% university enrolment by 2010. See the article "South-East Asia is looking for new ways to improve its people's skills" in the December 11, 2003 print edition of The Economist.

Recent Publications

Harry Patrinos and Toby Linden have just published a World Bank report "Lifelong Learning in the Global Knowledge Economy: Challenges for Developing Countries". This new report warns that developing countries will have little success boosting economic growth and reducing poverty unless they can close a growing 'knowledge' or education divide between themselves and richer countries. Investing in quality lifelong learning, the reports says, can help to close this gap by promoting economic vitality, reducing poverty, and encouraging open and cohesive societies.

Events

EDEN (European Distance and E-Learning Network Secretariat) is continuing its series of conferences, following the professional development and policy mainstream in European distance and
e-learning with a dedicated event June 16-19, 2004 in Budapest. The conference will address the core questions of how distance and e-learning can best play a role in capacity building, support modernisation and regional development. For further information see the website at http://www.eden-online.org.

EdInvest News is read by over 5,000 individuals. EdInvest, the education investment information facility, is a forum for bringing together individuals, corporations and other institutions interested in education and the future of developing countries. A service of the World Bank Group, EdInvest will provide information for making private investment in education possible on a global scale.

Michael Latham (send comments to edinvest@ifc.org )