Why is there proportionately more enrollment in private schools in some countries?

The proportion of students enrolled in private rather than public schools varies greatly among countries. The author tries to explain (1) the systematically higher proportion of enrollment in private schools in developing countries than in developed countries, at the secondary level, and (2) the seemingly random variation across countries within a given level of education and stage of development. The author argues that differentiated demand and nonprofit supply - both of which stem from cultural heterogeneity, especially religious heterogeneity - are the major explanations for variations in the proportion of private education within a given stage of development and educational level. By contrast, the author hypothesizes that the proportionately heavy enrollment in private secondary schools in developing countries stems from limited public spending, which creates an excess demand from people who would prefer to use the public schools but are involuntarily excluded and pushed into the private sector. Limited public spending on secondary education, in turn, is modeled as a collective decision which is strongly influenced by the numerous families that opt for many children, and that consequently can only afford to invest small amounts in each child, in developing countries. The results of regressions that determine private-sector size recursively and simultaneously with public educational spending are consistent with these hypotheses.