Vouchers, National Education Fund and School League Tables

I was alerted to these two letters recently published in the Sun and the Star by the author of the letters. The content of both letters is similar. The author, Wan Saiful Wan Jan, is Director-General of Malaysia Think Tank London. He basically recommends three proposals as ways to improve the standards of schools in Malaysia: a targeted voucher system, a National Education Fund, a school league table that is published every six months.

Given that the links to the Sun and the Star might be taken down or the urls might be changed later, I've copied the meat of Wan Saiful's proposals and pasted them below:

To overcome this, I propose three strategies. First, introduce a targeted voucher system. Second, set up a National Education Fund funded solely by corporate and individual donations. Third, publish a school league table every six months.

The targeted vouchers give parents with low household income the necessary funds. The vouchers can only be used to pay for education.

Through this system, schools no longer get automatic funding from the state. Instead, “vouchers” are given directly to parents who can then use the vouchers to pay for their children’s education needs at a school of their choice.

The National Education Fund would be funded by the private sector and individual contributions, not the Government. Companies and individuals who donate would gain tax relief as an incentive. Money from this Fund can be used to top up the vouchers if necessary, especially to assist the very poor to pay for other costs like transport, books and school uniform.

Removing school-based funding and giving money directly to parents would effectively make schools like any other private companies offering a service.

Schools must compete to offer services that are the best value for money. Schools that fail to deliver risk closure because parents would simply not send their children there.

The six-monthly league table would provide parents with a tool to compare performance of schools and therefore help their decision making process. It would also inject more competition to improve the schools.

Similar systems have proven to be effective in countries around the world. The report submitted to the Education Minister by Malaysia Think Tank London provides evidence of these successes.

I'm personally in favor of Proposals 1 and 3. The economist in me (the late Milton Friedman was a highschool hero of mine) supports giving parents more choice, providing them with more information and introducing more competition into the education system.

Out of the two proposals, I think that Proposal 3 is probably easier to implement in the short run. Singapore has been publishing school league tables for more than 15 years now and I've been a strong proponent of a similar system being set up in Malaysia.

I'm more sceptical about the 2nd proposal which is the setting up of a National Education Fund for the following reasons:

(i) Cost to the government - if the donations are tax deductible, the more successful this program is at eliciting donations, the more its costs the government in terms of revenue forgone, revenue that could have been used to spend on other parts of the education system such as building more schools.

(ii) Little incentives to donate - the flipside is that if the tax relief is too low, there's little incentive to donate to this fund and which defeats the purpose of setting up this fund in the first place.

(iii) Administrative problems - if this fund is substantial enough, it will not be easy to administer. Imagine having to process all sorts of applications for textbook money from poor students or from schools representing these poor students. Such a fund might be costly to administer and inefficient to boot.

I think that new ideas should be injected into our education system. The problem is that these ideas take a long time to 'seep' up to our leaders and also civil servants, especially those in the Ministry of Education. And even if these ideas are approved, we usually run into massive implementation problems. (Think late delivery of school text books when there has been a significant change in the syllabus or when the medium of instruction for Math and Science was changed from BM to English)

I will email Wan Saiful to ask him for his full paper and will write further posts on this issue. I'd encourage those who are interested in his report to email him directly. His details are found below:

Wan Saiful Wan Jan is Director-General of Malaysia Think Tank London. Previously, he was at the Commonwealth Policy Studies Unit (CPSU) and the Conservative Party's Research Department (CRD). The report "Introducing Choice and Competition into Malaysia's Education System" is available free by contacting Wan Saiful via email at: wansaiful@malaysiathinktank.org.

In the meantime, if anyone else has any other reports from this education workshop in Nottingham, England in November, 2006 (last month), please email myself (im_ok_man@yahoo.com) and Tony (tonypua@yahoo.com).