Headlines 2014

Swedish voucher-system debated


Today the Swedish education system is disputed and the pro-choice/voucher-system in particular – allowing parents and students the choice between any public or private school. In National Review Online Tino Sanandaji, IFN, argues that Sweden has an education crises, but it was not caused by school choice. “There is no doubt that the voucher reform was poorly implemented, but this doesn’t change the fact that the reform worked.” Also Gabriel Heller Sahlgren, affiliated to IFN, is debating the Swedish voucher-system in British media.

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Sanandaji writes that he “would gladly trade privatization for returning to time-tested old-fashioned teaching methods. The optimal solution would, however, be to actually experiment with Milton Friedman’s ideas”. He suggests true competition in the schools market. “Product innovation is how free market produces real gains.” Adding that over time, we can test which method produced the best outcomes, giving Milton Friedman’s ideas a fair test.

Tino Sanandaji as well as Gabriel Heller Sahlgren is, in writing about the voucher-system, answering to resent criticism by Ray Fisman, an economist at Columbia Business School, who argues that the Swedish voucher-system failed, citing the recent decline in Sweden’s school performance.

This is not true, argues Tino Sanandaji: One-third of Sweden’s municipalities still have no private schools. Social Democratic strongholds in northern Sweden in particular were less enthusiastic about licensing such institutions and if private schools were causing the Swedish school crisis, we would expect municipalities with no privatization to outperform the rest of the country. Sanandaji points to studies by Böhlmark and Lindahl, which suggest that school results, if anything, fell more in regions with no private schools.

Ray Fisman as well as Tino Sanandaji indicates other problems in today’s Swedish schools, such as grade inflation (teachers in private schools set higher marks than those in public schools). “The state was supposed to regulate private schools to ensure quality, but in practice, regulation was lax,” claims Sanandaji adding that Professor Fisman understates the corruption caused by the lack of control.

Still, results of the 1990s school reforms are encouraging: Many of the worst schools have closed as few students choose them. Bullying is a major problem in Swedish schools; with school choice, children are no longer forced to attend the same school as their tormentors. Ambitious immigrant children have the option to escape the ghetto and attend better schools. Some — though admittedly not most — private schools have been innovative and significantly improved education.

Sanandaji states that the voucher system doesn't constitute "free enterprise regulated by the invisible hand". The design of the Swedish voucher system plainly ignores economics 101. "Grading is a perfect example. Swedish universities are not allowed to adjust for grade inflation and have to take grades set by schools as given. This gives schools strong incentive to set grades excessively high. Students find out which schools that is lenient and take their voucher money there.” Though. Sanandaji sees a light in the tunnel: "Most of the problems Fisman points to, perhaps all of them, should have been avoidable if privatization had been enacted in a competent way".

Gabriel Heller Sahlgren, on the other hand, argues that the reading of the evidence is disastrous (Friedman Foundation) when dealing with Swedish school choice and test results. He refutes Professor Ray Fisman's statement that school choice reforms have been one reason behind Sweden’s fall in international test scores. Sahlgren evaluates academic research on the Swedish voucher reform finding "both short-term positive effects on test scores and grades, as well as on long-term outcomes such as marks in upper-secondary school and university credits ... The impact isn’t large, but it’s there. Profit-making and non-profit private schools have the same effects. And interestingly, the largest part of the impact occurs not because private schools are better than public schools, but because public schools react positively to external competition".

Sahlgren sets the rhetorical question: Are those effects merely caused by grade inflation. His answer is "no." He also argues for ending "the national ban on profit-making companies owning and operating state-funded schools
in England" (Education Investor)


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