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Vouchers for basic education in developing countries : a principal-agent perspective

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  • Gauri, Varun
  • Vawda, Ayesha

Abstract

Voucher programs consist of three simultaneous reforms: (1) allowing parents to choose schools, (2) creating intense incentives for schools to increase enrollment, and (3) granting schools management autonomy to respond to demand. As a result, voucher advocates and critics tend to talk past each other. A principal-agent framework clarifies the argument for education vouchers. Central findings from the literature, including issues related to variance in the performance measure, risk aversion, the productivity of more effort, multiple tasks, and the value of monitoring are found relevant for an analysis of vouchers. An assessment of findings on voucher programs in industrial countries, as well as a review of voucher or quasi-voucher experiences in Bangladesh, Chile, Colombia, Cote d'Ivoire, and the Czech Republic support the usefulness of the analytic framework. The authors conclude that vouchers for basic education in developing countries can enhance outcomes when they are limited to modest numbers of poor students in urban settings, particularly in conjunction with existing private schools with surplus capacity. The success of more ambitious voucher programs depends on an institutional infrastructure challenging to industrial and developing countries alike.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 3005.

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Date of creation: 31 Mar 2003
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Handle: RePEc:wbk:wbrwps:3005

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Related research

Keywords: Public Health Promotion; Health Monitoring&Evaluation; Gender and Education; Teaching and Learning; Primary Education; Teaching and Learning; Health Monitoring&Evaluation; Primary Education; Gender and Education; Education Reform and Management;

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References

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  1. King, Elizabeth M. & Orazem, Peter & Wohlgemuth, Darin, 1999. "Central Mandates and Local Incentives: The Colombia Education Voucher Program," Staff General Research Papers, Iowa State University, Department of Economics 1708, Iowa State University, Department of Economics.
  2. Joshua Angrist & Eric Bettinger & Erik Bloom & Elizabeth King & Michael Kremer, 2002. "Vouchers for Private Schooling in Colombia: Evidence from a Randomized Natural Experiment," American Economic Review, American Economic Association, American Economic Association, vol. 92(5), pages 1535-1558, December.
  3. Alejandra Mizala & Pilar Romaguera, 1998. "Desempeño escolar y elección de colegios: La experiencia chilena," Documentos de Trabajo, Centro de Economía Aplicada, Universidad de Chile 36, Centro de Economía Aplicada, Universidad de Chile.
  4. World Bank, 2001. "Czech Republic : Enhancing the Prospects for Growth with Fiscal Stability," World Bank Other Operational Studies 15690, The World Bank.
  5. Ritzen, Jozef M. M. & van Dommelen, Jan & De Vijlder, Frans J., 1997. "School finance and school choice in the Netherlands," Economics of Education Review, Elsevier, Elsevier, vol. 16(3), pages 329-335, June.
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  7. Michaelowa, Katharina, 2001. "Primary Education Quality in Francophone Sub-Saharan Africa: Determinants of Learning Achievement and Efficiency Considerations," World Development, Elsevier, Elsevier, vol. 29(10), pages 1699-1716, October.
  8. repec:lan:wpaper:4472 is not listed on IDEAS
  9. repec:lan:wpaper:4774 is not listed on IDEAS
  10. S Bradley & J Millington, 1998. "The effect of spatial competition on secondary school exam performance," Working Papers 539398, Lancaster University Management School, Economics Department.
  11. Chang-Tai Hsieh & Miguel Urquiola, 2003. "When Schools Compete, How Do They Compete? An Assessment of Chile's Nationwide School Voucher Program," NBER Working Papers 10008, National Bureau of Economic Research, Inc.
  12. Bengt Holmstrom & Paul R. Milgrom, 1985. "Aggregation and Linearity in the Provision of Intertemporal Incentives," Cowles Foundation Discussion Papers, Cowles Foundation for Research in Economics, Yale University 742, Cowles Foundation for Research in Economics, Yale University.
  13. Cecilia Elena Rouse, 1998. "Private School Vouchers And Student Achievement: An Evaluation Of The Milwaukee Parental Choice Program," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 113(2), pages 553-602, May.
  14. Derek Neal, 2002. "How Vouchers Could Change the Market for Education," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 16(4), pages 25-44, Fall.
  15. Le Grand, Julian, 1991. "Quasi-markets and Social Policy," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 101(408), pages 1256-67, September.
  16. World Bank, 2001. "Czech Republic : Enhancing the Prospects for Growth with Fiscal Stability," World Bank Publications, The World Bank, number 13864, August.
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Citations

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Cited by:
  1. Pablo González & Alejandra Mizala & Pilar Romaguera, 2002. "Recursos diferenciados a la educación subvencionada en Chile," Documentos de Trabajo, Centro de Economía Aplicada, Universidad de Chile 150, Centro de Economía Aplicada, Universidad de Chile.
  2. David Brasington & Diane Hite, . "School Choice: Supporters and Opponents," Departmental Working Papers, Department of Economics, Louisiana State University 2007-10, Department of Economics, Louisiana State University.
  3. World Bank, 2008. "The Political Economy of Policy Reform : Issues and Implications for Policy Dialogue and Development Operations," World Bank Other Operational Studies 7782, The World Bank.
  4. Harry Anthony Patrinos & Felipe Barrera-Osorio & Juliana Guaqueta, 2009. "The Role and Impact of Public-Private Partnerships in Education," World Bank Publications, The World Bank, number 2612, August.
  5. Aline Coudouel & Stefano Paternostro, 2005. "Analyzing the Distributional Impact of Reforms : A Practioner's Guide to Trade, Monetary and Exchange Rate Policy, Utility Provision, Agricultural Markets, Land Policy and Education, Volume 1," World Bank Publications, The World Bank, number 7251, August.
  6. David M. Brasington, . "School Choice and the Flight to Private Schools: To What Extent Are Public and Private Schools Substitutes?," Departmental Working Papers, Department of Economics, Louisiana State University 2006-04, Department of Economics, Louisiana State University.
  7. M. R. Bhatia & A. C. Gorter, 2007. "Improving access to reproductive and child health services in developing countries: are competitive voucher schemes an option?," Journal of International Development, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 19(7), pages 975-981.
  8. World Bank, 2004. "A Guide to Competitive Vouchers in Health," World Bank Publications, The World Bank, number 14836, August.
  9. Carolina Ostoic & Alejandra Mizala & Pilar Romaguera, 2004. "Equity and Achievement in the Chilean School Choice Experience," Econometric Society 2004 Latin American Meetings, Econometric Society 232, Econometric Society.
  10. Swidler, Ann & Watkins, Susan Cotts, 2009. ""Teach a Man to Fish": The Sustainability Doctrine and Its Social Consequences," World Development, Elsevier, Elsevier, vol. 37(7), pages 1182-1196, July.
  11. World Bank, 2013. "Republic of Madagascar : Mitigating the Impact of the Crisis on Education," World Bank Other Operational Studies 17012, The World Bank.
  12. Barrera-Osorio, Felipe & Raju, Dhushyanth, 2011. "Evaluating public per-student subsidies to low-cost private schools : regression-discontinuity evidence from Pakistan," Policy Research Working Paper Series 5638, The World Bank.
  13. Alejandra Mizala & Pilar Romaguera & Carolina Ostoic, 2004. "A Hierarchical Model for Studying Equity and Achievement in the Chilean School Choice System," Documentos de Trabajo, Centro de Economía Aplicada, Universidad de Chile 185, Centro de Economía Aplicada, Universidad de Chile.

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