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Saturday, May 14, 2005
Stick and buffalo
In response to my post, "Only nine licenses", Naveen Mandava of CCS and Spontaneous Order drew my attention to a book co-edited by him, "Law, Liberty and Livelihood", which details "how perverse government policy restricts employment possibilities for the poor, rickshaw pullers and street vendors" (from this review). The book is also cited in this article in Education World, in the context of how difficult, and costly, the government makes it to open a private school:
In an excellent post on Spontaneous Order, "Corruption as a symptom and not a cause", Mandava details the "two kinds of corruption in education: financial and regulatory." He concludes:
In other words, he who owns the stick owns the buffalo. And drinks all the buffalo milk.
After detailing the case histories of two unidentified regularly ripped off private schools in the national capital territory, Shah and Mandava pronounce the following verdict: "... it requires Rs.15 lakh to open (sic) a primary school, Rs.25-30 lakh for a middle school, Rs.60-70 lakh for a secondary school, finally a whopping Rs.1-1.2 crore for a higher secondary school. Without catering to the illegal demands of the sarkari babus (government officials) it is next to impossible to run a private school. In other words, operating through a purely legitimate route is wishful thinking on the part of an applicant." What they could perhaps have also added is that no self-respecting, middle class parent is inclined to enroll his/her child in inevitably chaotic, dysfunctional government schools. And with private schools so difficult to promote, a massive capacity shortage has been artificially created resulting in a plethora of forced donations, capitation and admission fees rackets within established institutions.
In an excellent post on Spontaneous Order, "Corruption as a symptom and not a cause", Mandava details the "two kinds of corruption in education: financial and regulatory." He concludes:
[W]hile efforts to remove financial corruption are well intentioned, a look at the financial corruption and the regulatory corruption outcomes will enable us to understand that most corruption arises from regulatory causes. When you have only one agency in a non-competitive market, obviously all rules will be flouted with gay abandon. It is only incidental that the government is the sole agency in an undeveloped education market. And you don't need to know economics to understand that in such a system, jiski lathi uski bhains!
In other words, he who owns the stick owns the buffalo. And drinks all the buffalo milk.
