Are private school fees in India "inflated"?

Adventures in fact-checking exfam lefties

Swati Narayan on Duncan Green’s blog celebrates a new law passed in India reserving 25% of private school places for underprivileged kids. As part of the deal, the government reimburses private schools, but only at the level of government per pupil funding rather than necessarily the fees charged by private schools. Swati writes:

The Act is categorical that the state will reimburse private schools only based on what it spends per pupil in government schools, which is typically much less. For-profit private schools are therefore keen to pass on the burden and increase their already inflated fees for the remainder of the class.

Are those fees really inflated? It is possible that high-end elite schools are getting a raw deal here, but most private schools are not high-end elite schools. Here are some numbers from Karthik Muralidharan, who is possibly the global expert on the economics of education in India. In his survey of rural primary schools in Andra Pradesh, spending per pupil at government schools is typically five times more than at private schools.

Average spending per pupil at government schools: 7680 rupees ($140) per year

Average fees at private schools: 1330 rupees ($24) per year

Right then. I don't have a strong opinion about this new law, but let's maybe have less demonisation of private schools in poor countries where the public education system is pretty dysfunctional yeah?

PFM in Myanmar: do you have to choose between coordination and flexibility?

This is a guest post from Ben French (a policy adviser formerly based in Juba)

Following two short recent visits to Myanmar where I was looking at the Public Financial Management (PFM) and Planning aspects of Myanmar’s reforms, I kept encountering the same question: How to balance coordination between donors with the need for a rapid and flexible response to reform?

The PFM reform programme in Myanmar has strong government leadership and appears to be off to a good start. In line with best international practice, development partners, under the leadership of the World Bank, have taken the initiative to coordinate amongst themselves. This has been followed by the establishment of a donor-government PFM working group. Almost all donors interested in the sector have aligned behind this which is very much to the credit of both the government and the World Bank. The working group has been the locus for coordination of PFM activities with the recent PEFA (Public Expenditure and Financial Accountability Review) and the PER (Public Expenditure Review) to show for it. This coordination sets an impressive and important precedent for government leadership and donor cooperation in PFM. Moreover, it shows that the international community has been learning from experience and is prioritising planning and coordination (as discussed in this report by ODI).

At the same time, Myanmar is changing rapidly and has only 24 months to deliver on its reform agenda before the election period takes hold in the run up to 2015. Within this period there is a need to embed the government’s reform process into its day-to-day functioning, in order to limit backsliding and to strengthen the hand of reformers. Given this, a more immediate, direct and flexible package of support is essential and critical in direct contrast to a more measured approach focused on laying the foundation for future work through planning and studies.

As an observer looking in, there is considerable tension between the ongoing planning and coordination for future larger scale programming, and the immediate support needed by the government in order to prepare the ground. I wonder how to strike a balance between coordination and planning and a rapid, flexible response? Is it a zero-sum game between the two? A balance is clearly called for as running in too quickly without a coordinated, joint government-donor plan leads to poorly sequenced, uncoordinated reforms that are poorly understood at the national level. However, if those reforms aren’t supported right now they could die on the vine before any of the future planning gets a chance to take root.

In the context of Myanmar, and other countries with both immediate and longer term PFM needs (usually conflict-affected, post-conflict, fragile states as well as countries in political transition) it seems that the government and donors can become stuck in a cycle of ‘planning to plan’ at the expense of delivering a quick, flexible programme of support. Granted, immediate support will not resolve all issues but they do ‘soften the ground’ for the long term and are complimentary to that long term planning.

Obviously, context and circumstance are essential for determining the balance between the two. However, the balance must be considered and there are a number of ideas worth considering.

First, delivering quickly and rapidly builds trust between partners which is important in and of itself but is also critical for the success of any cooperation long term. The concept of building trust through short term support that supports basic skills and processes within government demonstrably achieves the objective of building relationships between various stakeholders – and not just at the senior policy level but down in the trenches where support for long term programmes is most critical. In other words, keep it simple stupid. Provide focused training and support to the current reform process with the aim of making the government an intelligent customer which is able to determine what it needs and wants from the range of options it will be presented.

Second, recognise that even if short-term support is limited it can be clearly and easily linked to future programme development and planning. Rapid implementation should not be allowed to evolve into full implementation but it can, and should, provide useful experience and information to inform the long-term full implementation. In practice this will mean that flexible, upfront, support will need to focus on basic training, simple implementation and refinements to systems and process (see some other interesting work from ODI here, and here).

This balancing act is starting to take place in Myanmar with the EU and JICA placing technical advisors in the Ministry of Planning who will build government capacity and understanding on how to effectively coordinate and engage with other government agencies and development partners across a range of sectors (health, education, electricity, etc.). This short-term approach will be implemented prior to and whilst a longer term plan takes shape, both meeting the government’s need for reform support and allowing the development partners to demonstrate rapid success.

And finally, a warning. Any short term, flexible support should be designed in such a way that it co-opts as many stakeholders as possible Short-term support parachuted in, acting in isolation, and with no tie to long-term goals undermines the balancing act. At minimum this should mean that the short term support is part of the coordination process and reports to all the actors involved in coordination. Various World Bank and regional development bank trust funds do this reasonably well when there are funds available.

These general observations should, by no means, detract from the on-going successes in coordination in countries such as Myanmar especially as these pockets of coordination are islands of sanity in a larger and more complex donor environment. Instead, this coordination should be fostered, incorporating both quick short-term support as well as long-term planning and research. Both are critical to confidence building between stakeholders, success of current reforms and PFM in the future. Finding, and striking, the right balance between planning and flexible support through good coordination is essential to long term positive outcomes.

On Immigration

I need to get some of this stuff out of my head to make some space in there for my actual day job. Since the clusterfuck David Goodhart book-copy-and-pastes op-eds started coming out a few weeks ago my head has been all fogged up with rage. Half of the frustration is simply how poorly he structures his arguments.

So here is some structure.

At the highest level there are two things to care about
1. The impact of policy (this is the utilitarian, consequentialist angle)
2. The Kantian ethics (what is a just process? we should care about the means as well as the ends)

Point 2, made repeatedly by Michael Clemens and others in the open borders camp, is that regardless of what the consequences of immigration are, individuals have rights, and states shouldn't be able to prevent people from leaving countries. As a Brit with some education, I have the right basically to live wherever I want. The same does not apply to smarter and harder working people than me who happen to be born in South Sudan, or most developing countries. In technical terms, this is called "fucked up."

Back to point 1 - there are three areas of concern
1.1 - The impact on the receiving community
1.2 - The impact on the migrant
1.3 - The impact on the sending community

Now, the strongest evidence is clearly on 1.2 - there are massive overwhelming positive impacts for the migrants themselves, who can increase incomes by orders of 1000% overnight.

The weakest evidence is on the other two points. There are reasons, theoretical and empirical, to think that immigration can have both positive and negative impacts on communities at large.

On 1.1 - perhaps the strongest evidence amongst the lot, is that the labour market impacts on receiving communities are not large (they did not took our job). There isn't a lot of evidence on the impact on public services and the like - though on average the foreign-born living in Britain are larger net contributors to public finances than the native born. So we are left with something vague about identity and community (more on this in another post).

On 1.3 - there is strong evidence of positive impact through remittances - remittances are substantially larger than foreign aid flows. There isn't much evidence of a brain drain, and actually evidence pointing the other way towards a "brain gain." Neither is there any evidence of a damaging impact on political reform. On the contrary, there are reasons to think that diaspora can help fund and influence reform movements more effectively from outside a country where they are not subject to political oppression. More from Claire Melamed here.

So to conclude, strong positive evidence of positive impacts for migrants and receivers of remittances, and then a bunch of weak vague stuff about community and governance. Add to that, the ethical or rights-based arguments.

And finally back to Goodhart, and his line that we should not care about people from Burundi more than people from Birmingham. But do we really need to care about them more to be in favour of immigration? From my reading of the evidence, I don't think that immigration does impose a net cost on Britain, but even being generous and assuming it did, I would weight that impact to be of the order of 1/10th of the positive impact to the migrant. Caring about people from Birmingham is fine, but the question is how much more should you care about them than someone from Burundi. I would image that there is some ratio at which Goodhart would support imposing a cost on a Brummie for a gain to a Burundian. What if we could make a Brummie worse off by £1 to increase the welfare of a Burundian by £10 billion? Or is it really never acceptable for British government policy to reduce the welfare of a British person by any amount, no matter how small, in order to increase a foreigner's welfare, no matter how large the gain? Not even for £10 billion? Martin Wolf does make the case for a zero weight, which is at least a coherent and explicit position on the issue, even if I do think it is abhorrent. Elsewhere, in a long and math-y blogpost YouNotSneaky estimated that for Mexican-US immigration, you have to value a Mexican at less than 1/20th of an American to be against immigration.

Do you care about foreigners less than locals? What's your number? Exactly how much less? Are foreigners half a local person? A tenth? A hundredth?

So what exactly just happened to the economy of South Sudan?

Some analysis from the Sudd Institute: (via John Ashworth)

Barely three months after the oil shutdown, the whole nation started to feel the resultant pinch of economic hardships. Salaries of civil servants were no longer coming regularly and the monthly allowances that used to cushion up the low salaries of the civil servants were discontinued. The dollar appreciated against the South Sudanese pounds and was in unprecedented shortage, forcing the market into an abrupt shock; prices rose; and the purchasing power weakened. As well, violent crimes increased, with armed robbery becoming the order of the day. News about common citizens and business people being shot dead injured, and/or robbed were making headlines on almost daily basis. In a sense, these consequences are attributable to the economic hardships facing the nation.

The political economy of Nigeria and Indonesia

A Nigerian and an Indonesian attend a foreign university together in the 1960s and become friends. After graduation, each returns home to join the government. Several years later, the Nigerian visits his colleague in Jakarta, and finds him living in a big, luxurious house with a Mercedes car parked outside. ‘How can you afford such a nice house on a politician's salary?', asks the Nigerian. ‘Do you see that road?', replies the Indonesian, pointing to a magnificent highway outside. ‘Ten per cent.' Some time later, the Indonesian goes to visit his Nigerian friend, and finds him living in a vast palace with ten Mercedes cars parked outside. Amazed, he asks where the money had come from. ‘Do you see that road?' asks the Nigerian, pointing to a thick tangle of rain forest. ‘A hundred per cent.'

From the Economist (old, but good)

Paul Collier's Migration Book

Drawing on original research and numerous case studies, Collier explores this volatile issue from three unique perspectives: the migrants themselves, the people they leave behind, and the host societies where they relocate. As Collier shows, those who migrate from the poorest countries, primarily though not exclusive the young, tend to be the best educated and most energetic in their cultures. And while migrants often benefit economically, the larger impacts of mass migrations remain unsettling. The danger is that both host countries and sending societies may lose their national identities-- an outcome that Collier suggests would be disastrous as national identity is a powerful force for equity. Collier asserts that migration must be restricted to ensure that it helps those who remain in sending countries and also benefits host societies that make the investment on which migrant gains rely. 

This might just be the point at which I stopped being a fan of Paul Collier. I was quite excited about this book because I presumed that naturally it would be pro-immigration. I suppose his old white man demographics have outweighed all his education? I'll probably still read it, as presumably he will at least have a better grasp of at least some of the actual evidence on the issue than Goodhart. Still, it makes my skin crawl. I understand that we aren't going to win around the UKIP racists and get open borders any time soon, but it is deeply depressing when even development people and/or supposed lefties harbour this fear and suspicion of poor foreigners. Maybe brown people threaten your national identity Paul, but they don't threaten mine.

Anyway for now I'll stick with the simple chart which debunks the line that "national identity is a force for equity." Actually, two-thirds of global inequality can be found between countries rather than within countries. So even a perfect income distribution within countries would still leave two-thirds of global income inequality intact.

Branko Milanovic, (via Tim Worstall). Incidentally, surely - surely, Collier should have read Milanovic?

The Routledge Handbook of African Politics

If you were looking for a definitive overview of African Politics, you could probably do worse than this new volume, edited by Nic Cheeseman, David Anderson, and Andrea Scheibler. 32 chapters covering the State, Identity, Conflict, Democracy, Development, and International Relations.

For more, here is Andi writing at Democracy in Africa:

The Handbook, published last month, is the product of a collaboration between 35 established and emerging Africanist academics. Three years in the making, the Handbook is arguably the most comprehensive overview of African politics currently available on the market and we hope it will become a standard reference book for students seeking to understand the development of, and transitions within, contemporary Africa. ... 

Self-recommending. (And a 20% discount here)

Build on the greenbelt now

the true enemy of our threatened wildlife like the nightingale is not housing but agricultural intensification ... 

There is now more bio-diversity in back gardens than on English farms. ... 

Intensively farmed land has a negligible - even negative - environmental value and is almost sterile from the point of view of wild life; take a look at the 2011 National Ecosystem Assessment. That is the sort of land we should be allowing houses to be built on. The vehement opposition to building on any intensively farmed greenbelt land fails to recognise it for what it is – almost worthless from a social, environmental or amenity perspective. 

Paul Cheshire, Emeritus Professor of Economic Geography at LSE

From the department of baffling headlines

It's been a while since I've beaten on the Guardian (I love you really Guardian, you're* still my main newspaper, despite the typos in 3 out of 3 articles I read the other day).

But really:

Stowaway from Angola highlights airport security problems 

Police continue to try to identify man who fell from BA plane on to London pavement, the second African stowaway in recent weeks

Personally, I'd say that the story of a young man in his 20s, wearing a grey hoodie, jeans and trainers, who was so desperate for the chance of a better life that he risked and lost his life by sneaking into the hold of an aeroplane bound for London, mostly highlights the utterly grotesque global inequality that we choose to tolerate because they are mostly out of sight and out of mind, and we are worried about the impact of all these foreigners on our precious "community" or some other vague bullshit. Not fucking airport security.

(*embarrassing typo here fixed but whatevs, I can and will continue to beat on the Guardian for typos, because this is not a national newspaper it is a BLOG. Thanks as ever for the vigilant editing though K)

Goldin on Global Governance

Almost as scary is his insider’s view of international organisations’ lack of readiness to deal with such threats. He questions the future effectiveness of the UN, and the legitimacy of the International Monetary Fund and World Bank, created at the 1944 Bretton Woods conference. “The picture of global governance today is one of duplication, ambiguity, overlap and confusion,” he concludes. Tax-free salaries and comfortable career paths encourage entrenched views and organisations out of step with modern working practices. 

Pretty damning, from the FT review of Ian Goldin's new book.

Nightingales not neighbours

Oh and just to add additional insult, Simon Jenkins thinks we should be prioritising habitat for 180 nightingales over houses for around 15,000 people, valuing each nightingale at nearly 100 people. I've got nothing against nightingales, but do they each really get priority over a hundred people?

Why aren't young people in England angry about housing?

Apologies for being such a bore, but it drives me nuts that we aren't building enough houses in this country. Every year there are twice as many new households as there are new houses built. Every year. This is the first lesson of economics - prices are set by supply and demand - if demand continues to outstrip supply twofold every year then prices will continue to increase and houses will continue to be split into ever smaller fragments. I rented a beautiful apartment last month from a young married couple, both Oxford graduates, one of them a doctor. It was beautiful, except it was also quite symbolically the converted basement of a much more beautiful house above it. Even the most successful people of my generation are doomed to living in the basements of our parent's generation.

And yet simply building more houses, in the places that people want to live, and yes occasionally on some muddy field in a part of the greenbelt, would create jobs, reduce prices, reduce the housing benefit bill, and create all sorts of new positive dynamic externalities as places like Oxford are allowed to follow their natural economic geography and increase in density of smart people. But when the university does try to build more housing, on brownfield land next to the railway in the centre of town, campaigners complain about ruining the skyline. Not even building on "greenbelt," not destroying animal habitat or some beautiful piece of land itself, but obscuring the view of a church spire. Why aren't young people angry about the miserable hovels we are forced to live in? Most of us have been lucky enough to escape Britain at some point in our lives - we've seen the possibilities of better cheaper housing that exists in almost any other country in the world. Where is the angry youth pro-building lobby?

And now in addition to already having the smallest and most expensive houses in Europe to choose from, my  search in Oxford is thwarted by "Housing in Multiple Occupation" rules. Any rented house with more than one "household" in it needs to be registered, with increased legal obligations on the landlord, which means lots of landlords just don't want to bother registering, and so can't or won't rent to a group of young professionals instead of a family. So after being priced out of getting our own houses and basically forced to share because of government planning regulation, we're now thwarted in attempts to find a house which the government will allow us to share because of yet more well-meaning but utterly self-defeating regulation. Here's a better way to take power from landlords and give it to renters: Build. More. Houses.

Higher Education in Africa

Ugandan journalist Daniel Kalinaki posted this exam from the Kampala International University on his twitter feed a couple of weeks ago, and it has been a bit stuck in my head. Is this really real? Is this normal? Their wikipedia page says that KIU is ranked 58th out of African universities. It's deeply sad if true.

UK Public Spending

I don't think I've seen any proper discussion of the composition of UK public spending amongst the current debates on cuts and benefits, so here are a few charts from the IFS. 

From a 2009 survey of public spending you can see what the main categories are - social security, NHS, education, and defence. 

Then this observation compares mid-Labour pre-crisis spending in 2003 to estimated spending by the end of the current government in 2007. They aren't all that different, except for increases in health spending, pensions, and debt interest.

Finally this 2012 survey of the benefit system breaks down the largest category, social security, into recipients. Unemployment benefits make up just 2.6% (though people out of work will also claim some of the low-income benefits such as housing allowance, and there are no doubt some people on sick and disability who could manage some form of useful paid activity, even if the reforms to the testing regime have been poorly handled and very unfair on some people). Nevertheless, 60% of social security is for the elderly and for children.