Regulating private education
By DR FAISAL BARI
It seems that a lot of people, parents, bureaucrats, policy-makers and other stakeholders want providers of private education, at the school level, to be regulated. They feel schools get away with too much when they are allowed to charge the fees they want and make decisions about curriculum and other related issues in any way they like. And the government has indeed been moving in this direction.
Apart from other legislations and requirements, provincial and federal governments have also been thinking about the need for sector-specific regulator for private education. The federal government passed the ordinance for setting up a private education regulator for capital territory back in 2006. The regulator has been in operation for about a year now. This ordinance and regulator could, potentially, act as a pilot for similar regulations and regulators in the provinces.
The ordinance under which the federal regulator has been set-up has some major and a lot of minor issues. We will mention a few in due course but, more importantly, despite the regulator being there in Islamabad, the case for regulation of private education is not very clearly established. We need to have a detailed look at that before we go to the ordinance.
Why do we want to regulate the provision of education? It is true that school education has a public good element where the society has an interest in a) ensuring that all children in Pakistan get quality school education, and b) that there are certain elements, possibly related to civic roles of citizens, that are present in the education of all children. But this public good element does not automatically necessitate regulation and especially a specific regulator.
From a rights argument and from the argument of education being a public good, all we need is that every child has access to good quality education. This is the responsibility of the state but whether the state provides the access through public schools or whether it happens through provision of equally accessible private education is immaterial. Since most private education provision is for profit, if a government relies on private education providers it has to ensure access for the poor but, once again, that also does not mean that we need regulation. Similarly the fact that the society needs some input into curriculum so that national goals are taken care of is also not an argument for regulation.
This can also be achieved through managing the school leaving examination system. For example, if we wanted to ensure that students have a good understanding of South Asian history or Islamic history, we could set-up exams for these areas at the matriculation or intermediate level. The state could specify the syllabi for the areas, and all schools, irrespective of ownership, will have to prepare students for these areas. Again there does not seem to be a need for regulation here.
The most popular demand for regulation seems to come from parents who complain that there should be some mechanism for ensuring that private schools do not exploit their monopoly power to extract higher level of tuition fees from parents. This aspect needs exploration. We usually do not require regulation for prices of goods where competition is keen and there are many producers in the field.
Regulations seem more justified in areas where there are few producers, differentiated products and/or problems in information flows. Now that 30-40 percent of school going children are enrolled in private schools countrywide, and the proportion is much higher in urban areas as well as the Punjab, the argument for limited choice and concentration probably does not hold. But the argument regarding information flows still might have some weight.
Though a recent World Bank funded research paper has argued that there is evidence to suggest that the information market, even in rural areas, works reasonably well. But it is a fact that there are time lags in spread of reputation, especially when we do not have formal and specially designed channels for information flows. Here we could have reason for regulation. But this is not to say that the regulator should restrict the fees that providers can charge or monitor other policies that schools should have, it just means that we might need regulatory mechanisms, which could be private even, that facilitate the flow of authentic and credible information on quality, price, and other relevant variables.
There are other things that require attention too. For schools we need buildings that are suitable for the purpose, and are safe and secure for children. We need teachers with certain qualifications and with certain standing in the community.
Schools should have a certain minimum infrastructure and equipment. But these are all things that do not necessarily need a sector specific regulator. Building codes should take care of building requirements. Labour codes should take care of teacher benefits and information sharing should take care of qualification issues. Infrastructure and facilities issues can be tackled through better information as well. So, in many areas either regulations are not needed or the needed regulations come under the purview of different already existing laws (building codes, labour etc) and we do not need sector specific regulators for getting these implemented.
So the case of regulating private provision of schooling is much more circumscribed than it is made out to be. If we look from that perspective, the Islamabad law is quite excessive and at the same time incomplete. Strangely the law only gives power to the regulator to regulate private schools and not public ones. If we are going to have a regulator of educational providers should the regulator not have jurisdiction over every body that provides education? Would it not have been surprising to have limited NEPRA to IPPs only and exempted WAPDA from regulation? For that matter would it not have been strange to limit PTA from regulating PTCL? But this is the case in Islamabad law.
And then the ordinance clearly over-regulates. It gives power to the regulator to set limits on fees (though this power is not being used right now), to inspect schools, to interfere with terms and conditions of service of teachers, to interfere with curriculum. It also gives powers to the regulator to shut down schools if they are in violation of rules, and it can also fine as well as imprison principals of schools, for up to one year, for violations.
The principals can appeal decisions to the federal secretary education, but the decision of the education secretary is supposed to be final and the law does not even give recourse to people to invoke the high courts if they want to contest the secretary's decision. This seems draconian and even contrary to the spirit of rights provided in the constitution where every person has the right to petition the higher courts of Pakistan if he or she is not satisfied with decisions at lower judicial or any administrative level.
The officers of the regulatory authority are provided indemnity if they act in good faith in the course of regulating institutions, but principals and owners can be incarcerated if they even fail to ensure that right information is going to the regulator.
The law, as it stands, is ridiculously unjust and counter productive. What stops it from being intrusive right now is not the limitation of the law, but luckily the government has not been able to give resources to the regulator so that it is underfunded and understaffed. Had the government been more serious about regulation and operationalised the law properly, it could have had major distorting and negative impacts on the provision of private education in Islamabad area. The spirit in which the regulation has been set-up is that of control and not of facilitation and developing information flows and sharing.
Regulation, in most cases in Pakistan, whether it be PEMRA, NEPRA, OGRA, CCP, SECP, SBP, or any other organisation, it seems, is largely seen as a means of control and for imposing limits on organisations in a sector. It is true, in cases of restricted competition and other special circumstances, regulation is indeed for control, but that is not the general purpose of regulation. Regulation is a way of facilitating markets. In fact markets cannot function without regulations. Regulation is not a substitute for markets, we need regulations to complete markets and where markets can work we need to ensure we do not over regulate.
Since there is demand for regulation of private education, but private education is here to stay as the government seems to have given up on ensuring that it is able to provide good quality education to all children in Pakistan, we need to think through the need for regulation of education and we need to be judicious. Islamabad has a recent and modern law for this. This could act as an example for others. But we find this to be a poor law.
It is incomplete in some ways and clearly over-regulates in other places. The saving grace is of course that the government has been unable to operationalise it fully. We should have a comprehensive review of this law at some point soon, and think through the idea of regulation of private education in much more detail or we risk distorting this market too.
The writer is an associate professor at LUMS and an economic analyst
By DR FAISAL BARI
It seems that a lot of people, parents, bureaucrats, policy-makers and other stakeholders want providers of private education, at the school level, to be regulated. They feel schools get away with too much when they are allowed to charge the fees they want and make decisions about curriculum and other related issues in any way they like. And the government has indeed been moving in this direction.
Apart from other legislations and requirements, provincial and federal governments have also been thinking about the need for sector-specific regulator for private education. The federal government passed the ordinance for setting up a private education regulator for capital territory back in 2006. The regulator has been in operation for about a year now. This ordinance and regulator could, potentially, act as a pilot for similar regulations and regulators in the provinces.
The ordinance under which the federal regulator has been set-up has some major and a lot of minor issues. We will mention a few in due course but, more importantly, despite the regulator being there in Islamabad, the case for regulation of private education is not very clearly established. We need to have a detailed look at that before we go to the ordinance.
Why do we want to regulate the provision of education? It is true that school education has a public good element where the society has an interest in a) ensuring that all children in Pakistan get quality school education, and b) that there are certain elements, possibly related to civic roles of citizens, that are present in the education of all children. But this public good element does not automatically necessitate regulation and especially a specific regulator.
From a rights argument and from the argument of education being a public good, all we need is that every child has access to good quality education. This is the responsibility of the state but whether the state provides the access through public schools or whether it happens through provision of equally accessible private education is immaterial. Since most private education provision is for profit, if a government relies on private education providers it has to ensure access for the poor but, once again, that also does not mean that we need regulation. Similarly the fact that the society needs some input into curriculum so that national goals are taken care of is also not an argument for regulation.
This can also be achieved through managing the school leaving examination system. For example, if we wanted to ensure that students have a good understanding of South Asian history or Islamic history, we could set-up exams for these areas at the matriculation or intermediate level. The state could specify the syllabi for the areas, and all schools, irrespective of ownership, will have to prepare students for these areas. Again there does not seem to be a need for regulation here.
The most popular demand for regulation seems to come from parents who complain that there should be some mechanism for ensuring that private schools do not exploit their monopoly power to extract higher level of tuition fees from parents. This aspect needs exploration. We usually do not require regulation for prices of goods where competition is keen and there are many producers in the field.
Regulations seem more justified in areas where there are few producers, differentiated products and/or problems in information flows. Now that 30-40 percent of school going children are enrolled in private schools countrywide, and the proportion is much higher in urban areas as well as the Punjab, the argument for limited choice and concentration probably does not hold. But the argument regarding information flows still might have some weight.
Though a recent World Bank funded research paper has argued that there is evidence to suggest that the information market, even in rural areas, works reasonably well. But it is a fact that there are time lags in spread of reputation, especially when we do not have formal and specially designed channels for information flows. Here we could have reason for regulation. But this is not to say that the regulator should restrict the fees that providers can charge or monitor other policies that schools should have, it just means that we might need regulatory mechanisms, which could be private even, that facilitate the flow of authentic and credible information on quality, price, and other relevant variables.
There are other things that require attention too. For schools we need buildings that are suitable for the purpose, and are safe and secure for children. We need teachers with certain qualifications and with certain standing in the community.
Schools should have a certain minimum infrastructure and equipment. But these are all things that do not necessarily need a sector specific regulator. Building codes should take care of building requirements. Labour codes should take care of teacher benefits and information sharing should take care of qualification issues. Infrastructure and facilities issues can be tackled through better information as well. So, in many areas either regulations are not needed or the needed regulations come under the purview of different already existing laws (building codes, labour etc) and we do not need sector specific regulators for getting these implemented.
So the case of regulating private provision of schooling is much more circumscribed than it is made out to be. If we look from that perspective, the Islamabad law is quite excessive and at the same time incomplete. Strangely the law only gives power to the regulator to regulate private schools and not public ones. If we are going to have a regulator of educational providers should the regulator not have jurisdiction over every body that provides education? Would it not have been surprising to have limited NEPRA to IPPs only and exempted WAPDA from regulation? For that matter would it not have been strange to limit PTA from regulating PTCL? But this is the case in Islamabad law.
And then the ordinance clearly over-regulates. It gives power to the regulator to set limits on fees (though this power is not being used right now), to inspect schools, to interfere with terms and conditions of service of teachers, to interfere with curriculum. It also gives powers to the regulator to shut down schools if they are in violation of rules, and it can also fine as well as imprison principals of schools, for up to one year, for violations.
The principals can appeal decisions to the federal secretary education, but the decision of the education secretary is supposed to be final and the law does not even give recourse to people to invoke the high courts if they want to contest the secretary's decision. This seems draconian and even contrary to the spirit of rights provided in the constitution where every person has the right to petition the higher courts of Pakistan if he or she is not satisfied with decisions at lower judicial or any administrative level.
The officers of the regulatory authority are provided indemnity if they act in good faith in the course of regulating institutions, but principals and owners can be incarcerated if they even fail to ensure that right information is going to the regulator.
The law, as it stands, is ridiculously unjust and counter productive. What stops it from being intrusive right now is not the limitation of the law, but luckily the government has not been able to give resources to the regulator so that it is underfunded and understaffed. Had the government been more serious about regulation and operationalised the law properly, it could have had major distorting and negative impacts on the provision of private education in Islamabad area. The spirit in which the regulation has been set-up is that of control and not of facilitation and developing information flows and sharing.
Regulation, in most cases in Pakistan, whether it be PEMRA, NEPRA, OGRA, CCP, SECP, SBP, or any other organisation, it seems, is largely seen as a means of control and for imposing limits on organisations in a sector. It is true, in cases of restricted competition and other special circumstances, regulation is indeed for control, but that is not the general purpose of regulation. Regulation is a way of facilitating markets. In fact markets cannot function without regulations. Regulation is not a substitute for markets, we need regulations to complete markets and where markets can work we need to ensure we do not over regulate.
Since there is demand for regulation of private education, but private education is here to stay as the government seems to have given up on ensuring that it is able to provide good quality education to all children in Pakistan, we need to think through the need for regulation of education and we need to be judicious. Islamabad has a recent and modern law for this. This could act as an example for others. But we find this to be a poor law.
It is incomplete in some ways and clearly over-regulates in other places. The saving grace is of course that the government has been unable to operationalise it fully. We should have a comprehensive review of this law at some point soon, and think through the idea of regulation of private education in much more detail or we risk distorting this market too.
The writer is an associate professor at LUMS and an economic analyst
