F A Hayek, RTE and Voucher

Take education as a test case. Several states have education vouchers, with differing conditions. Uttarakhand has Pahal, with a stipulation that there cannot be a government school (or Education Guarantee Scheme centre) within 1 km of the habitation. Rajasthan has two separate schemes — Gyanodaya Yojana (where new secondary schools are set up by the private sector and state-funded vouchers are used) and Shikshak Ka Apna Vidyalaya (where trained and unemployed teachers set up schools in backward areas and vouchers are used). It is early days, but Uttar Pradesh proposes vouchers for poor students who wish to study in English-medium schools. Madhya Pradesh has a scheme known as Paraspar, where Rs 3,000 is transferred to private schools for students from economically weaker sections. There are pilot schemes in Delhi too. One way to interpret the RTE Act is that the government has recognised the public education system cannot deliver. Girls in Bihar wear uniforms and ride bicycles, but still mostly to government schools. The reason is that private schools still don’t exist. That’s because there are serious entry barriers to setting up private schools. Once roads are built and such licensing restrictions eased, the moral of the bicycle story is that one should transit towards education vouchers. But, as mentioned earlier, the RTE Act doesn’t ease licensing restrictions. It makes them tougher.

Fifty years ago, Friedrich Hayek wrote a book titled The Constitution of Liberty. This is what it said:

“It would now be entirely practicable to defray the costs of general education out of the public purse without maintaining government schools, by giving the parents vouchers covering the cost of education of each child which they could hand over to schools of their choice. It may still be desirable that government directly provide schools in a few isolated communities where the number of children is too small (and the average cost of education therefore too high) for privately run schools.”

(From A bicycle built for many by Bibek Debroy)