Private Schools in the Poorest Countries - Cato Institute · 2016-10-20 · September/October 2005 Vol. XXVII No. 5 Private Schools in the Poorest Countries JAMES TOOLEY is director

September/October 2005 Vol. XXVII No. 5

Private Schools in the Poorest Countries

JAMES TOOLEY is director of the E. G. West Centre forMarket Solutions in Education at the University of Newcas-tle, U.K. He is the author of Reclaiming Education and TheGlobal Education Industry and the coeditor of What Ameri-ca Can Learn from School Choice in Other Countries, inwhich a longer version of this article appears.

The Cato Institute’s pocket Constitution has beenshowing up in more and more places. It’s been seenin ABC News’s tribute to Peter Jennings, in Sen. TrentLott's hand on Face the Nation, and brandished

by Sen. Robert Byrd on the Senate floor and on Meet thePress (above). Cato has distributed more than three millioncopies, and it's now also available in Spanish and Arabicversions. MORE ON PAGE 4

BY JAMES TOOLEY

In April 2004, the Global Campaignfor Education launched its self-styled“World’s Biggest Ever Lobby,” where“politicians and leaders in 105 coun-

tries came face to face with children.” Near-ly one million people joined in “to speakout for the right to education.” NelsonMandela added his voice to the “millionsof parents, teachers and children aroundthe world” “calling on their governmentsto provide free, good quality, basic educa-tion for all the world’s children.”

However well-intentioned, the GlobalCampaign for Education is overlookingsomething rather important that is hap-pening in developing countries today: thephenomenal growth of private schools forthe poor.

I first discovered for myself the phe-nomenon of private schools for the poorwhile consulting for the InternationalFinance Corporation, the private financearm of the World Bank, in Hyderabad,India, in 2000.

STEPHEN SLIVINSKI:“I think the era of biggovernment is over. The era of even biggergovernment has begun.”

Page 14

JIM COOPER:“Both parties have fallen down on theirresponsibility to reduceour federal budget deficits.” Page 12

HEALTHY COMPETITION:“The health care problem in the UnitedStates is not as dire assome observers wouldhave us believe.” Page 3

Meet the Press, July 18, 2004

Continued on page 9

ruling in the Kelo case.• In several cases, the Supreme Court ruled in favor of restric-

tions on the reach of the commerce clause until the disas-trous 2005 ruling in the Raich case.

• The Bush administration is reorienting foreign aid to poorcountries in which the government is enforcing propertyrights, reducing corruption, and the like.

• Health savings accounts were approved in the Medicare leg-islation of 2003.

• All national class action suits were moved to federal courtsby 2005 legislation.

• Social Security choice has been the major domestic policyinitiative of the Bush administration in 2005.

Most of those measures required the support of a Democratic pres-ident or substantial Democratic support in Congress and, once approved,are unlikely to be reversed by a change in the majority party.

“So who’s bookless now? [again quoting Kesler] The publisherof the New Republic, no less, admitted recent-ly: ‘It is liberalism that is now bookless anddying. Who is a truly influential liberal mindin our culture?’ Martin Peretz asked, ‘Whoseideas challenge and whose ideals inspire? . . .There’s no one, really. What’s left is thelaundry list: the catalogue of programs . . .that Republicans aren’t funding, and the blogs,with their daily panic dose about how theBush administration is ruining the country.’”

The Democrats, however, are sharplydivided about whether ideas matter. JonathanChait, a senior editor of the New Republic,recently wrote that winning elections is impor-

tant but that new policy ideas are not necessary to win elections.The favorite guru of the Democratic leadership is ProfessorGeorge Lakoff, a linguist from Berkeley who argues that it is onlyhow ideas are “framed” that is important. On the other hand, thenew Democracy Alliance has received financial commitments of atleast $80 million over the next five years “to promote consistentlyand coherently a set of ideas, policies, and messages” by fundingleft-leaning policy institutes and training centers.

As libertarians with no enduring commitment to either majorparty, we should welcome a new competition of ideas from the left.The Bush administration and too many other Republicans haveembraced a form of big government conservatism that does notaddress the major problems of either foreign or domestic policy.New policy ideas from any source can be valuable. And substantialsupport from both major parties is usually necessary to approve andsustain most major policy reforms. We welcome the new policy insti-tutes. When you are ready, we look forward to a discussion of yournew policy proposals.

—William A. Niskanen

Ahalf century ago the comfort-able ideologues of the left con-cluded (quoting Charles Keslerfrom the Claremont Review

of Books) that “American conser-vatism was inarticulate—–’bookless,’John Kenneth Galbraith once remarkedacidulously—because it had nothingto say either about or to America.With his usual acuity, Galbraith’spronouncement came in the midstof the century’s greatest outpouringof conservative books.”

And after a decade or so of ges-tation, almost all of the major eco-

nomic policy proposals made during the past 30 years originated onthe libertarian right. Many of them were first proposed by one man,Milton Friedman, in one book, Capitalismand Freedom, published in 1962. The list isan impressive record of the power of ideaswhen guided by principle, preparedness, andpatience:

• Military conscription ended in 1973.• Economic deregulation started in the

late 1970s.• Spending and tax limit amendments

were approved in more than one-halfof the states, beginning in 1978.

• The supply-side perspective reorient-ed fiscal policy to focus on increasinglong-term economic growth by reduc-ing marginal tax rates, beginning with the reduction of thetax rate on capital gains in 1978 and the general reductionof tax rates in 1981.

• Monetary policy became the primary policy to stabilize thegrowth of aggregate demand and reduce inflation; it wasfirst implemented by Paul Volcker in 1979 and reinforcedby the Reagan administration in 1981.

• The first broad-based tax reform was approved in 1986.• Marketable emission rights were first approved in the Clean

Air Act of 1990.• The North American Free Trade Agreement was approved

in 1993. • The combination of welfare reform and an increase in the

earned income tax credit was approved in 1996, reorientingwelfare from a payment for not working to a subsidy ofthe earnings of low-wage workers.

• Limited school choice programs have been approved in sev-eral states, and in 2002 the Supreme Court approved theright of voucher students to attend schools run by religiousorganizations.

• In several cases, the Supreme Court ruled in favor of restric-tions on the legal taking of property until the disastrous 2005

2 • Cato Policy Report September/October 2005

Chairman’s Message

Welcome the New Competition from the Left

❝Almost all of themajor economic

policy proposals madeduring the past 30years originated on

the libertarian right.❞

More than 815,000 Canadians are cur-rently on waiting lists for medicaltreatment. The British National HealthService cancels 100,000 surgeries every

year because of resource shortages. In HealthyCompetition: What’s Holding Back HealthCare and How to Free It, the Cato Institute’sdirector of health policy studies Michael F.Cannon and director of health and welfarestudies Michael D. Tanner argue that gov-ernment-run medical services often fail theirpatients and explain how more competitioncould make higher-qualityhealth care available to moreAmericans at lower prices.

In an effort to help morepeople gain access to healthcare, the U.S. government hasdrastically limited Americans’choices about their insurancecoverage and their medicalcare. Tax incentives for employ-er-provided health insurancemake individual coverage pro-hibitively expensive, lockingpeople into whatever cover-age their employers chooseand keeping them tied to theirjobs for fear of losing cover-age. Senior citizens must acceptMedicare as their primary health care providerin order to keep their Social Security benefits.Health savings accounts (HSAs) were intro-duced in 2003 to give patients a limitedability to save and budget for medical expens-es. Tanner and Cannon suggest that the expan-sion of HSAs would give workers control overall of their health benefits and that they wouldmake wiser, more careful medical decisionsabout spending their own money.

Cannon and Tanner’s analysis of the hid-den costs of Medicaid and Medicare alsodemonstrates how such programs waste morethan they benefit recipients. Medicaid andMedicare routinely pay doctors less thanthe cost of providing service, and the doctorsrecoup the costs by overbilling privately insuredconsumers. High prices make private insur-ance more expensive and therefore harder forpoor workers to afford. Higher premiums,Cannon and Tanner say, lead to higher costsfor employers, which lowers wages, raisesunemployment, and makes employers lesslikely to offer any health coverage to their

lowest-income workers. The total cost ofhealth care regulation in the United States isestimated at more than $300 billion, a costthat puts health insurance beyond the meansof about 7.5 million Americans. Attempts tohelp the poor get health care may actually bemaking them poorer.

Government’s attempts to protect peoplefrom bad medicine have also been a failure.The book estimates that between 1,200 and12,000 Americans die each year because treat-ments that could have saved their lives were

delayed or rejected bythe Food and DrugAdministration. Ifpatients and their doc-tors could make privatedecisions about the risksand benefits of experi-mental treatmentoptions, many serious-ly ill patients wouldchoose to take a chanceon a new treatment, andperhaps thereby pro-long their lives andexpand our knowledgeof medicine.

Despite their criticisms,Tanner and Cannon

remind readers that the health care problem inthe United States is not as dire as some observerswould have us believe. U.S. medicine still pro-duces the best outcomes in the world for every-one from premature babies to elderly cancerpatients. American companies are the chief sourceof new treatments and procedures used to savemillions of lives, and medical training and researchare the best in the world. As Tanner and Can-non point out, the best way to improve our med-ical system is to give more Americans the abili-ty to choose the best treatments that modernmedicine has to offer and to remove restrictionsthat keep providers from improving care. Thecompetitive market makes more services avail-able to patients at a lower cost than any othersystem, and we must harness its power to ensurethat Americans remain healthy for generationsto come.

Healthy Competition: What’s HoldingBack Health Care and How to Free It is avail-able ($9.95 paper) from Cato Institute Booksat 1-800-767-1241 or on the Cato websiteat www.cato.org. ■

September/October 2005 Cato Policy Report • 3

Curing American Health CareGeorge Shultz calls book “essential reading”

Cato executive vice president David

Boaz's 1997 book, Libertarian-ism: A Primer, continues to be

translated and published in other

languages. Above, from the top, are the

Russian, Japanese, Bulgarian, English orig-

inal, Serbian, Czech, and audio versions.

At the recent Mont Pèlerin Society meeting

in Iceland, Boaz met with his Bulgarian and

Czech translators. Left to right, Bulgarians

Latchezar Bogdanov and Georgi Angelov,

Boaz, and Czech economist David Lipka.

Polish and Mongolian editions have just

been published, an Arabic translation is

under way, and publishers are being

sought for Chinese and Spanish editions.

The translations are part of the Cato Insti-

tute's commitment to spread the first prin-

ciples of liberty and limited government

throughout the United States and beyond.

Libertarianismin Translation


Cato Constitution

That was no surprise to the Cato Insti-tute. A few years earlier executive vicepresident David Boaz read in a newspa-per article that Jennings had pulled outhis pocket Constitution at a commence-ment address, so he sent Jennings a fewcopies of the Cato edition. Jennings calledBoaz and told him that he always carriedthe Cato edition and was delighted tohave extra copies.

Jennings isn’t the only prominent Amer-ican to rely on the Cato Constitution.Members of the U.S. Senate have oftenbeen seen on C-SPAN and other televi-sion shows reading from their pocket Con-stitutions—as unlikely as that may seemto observers of Congress’s actions. Forexample, Sen. Robert F. Byrd (D-WV)

was recently seen waving the Cato Con-stitution throughout an hour-long floorspeech on C-SPAN and also in an inter-view on Meet the Press. As Boaz once tolda New York Times reporter in an e-mail

On World News Tonight on August 8,ABC News reported that its late anchor,Peter Jennings, always carried a copy ofthe U.S. Constitution in his pocket and

had ordered 100 copies to hand out. His copy,displayed on screen, was Cato’s pocket editionof the Declaration of Independence and theConstitution, with a preface by senior fellowRoger Pilon.

Peter Jennings reads from the Cato Constitution at his Amherst College commencement address.


interview: “Unlike most senators, Sen.Byrd remembers that the Constitutiondelegates the power tomake law and the pow-er to make war to Con-gress, not the president.But if he really took theConstitution serious-ly, he’d realize that thelimited powers it givesthe federal governmentwouldn’t include many of the New Deal and Great Society programs that haveopened up whole new vistas for pork inWest Virginia.”

It even shows up in fiction: the Show-time movie DC 9/11 showed a WhiteHouse aide waving a copy of the littleburgundy book in the Oval Office.

Since its first publication in 1998, Catohas distributed more than four million

copies of the pocket Constitution. Copieshave been distributed to all members of

Congress, all state leg-islators, all federaljudges, many studentgroups, and a groupof 2,000 Russian polit-ical leaders visiting theUnited States throughthe auspices of theLibrary of Congress.

Last fall Cato published a bilin-gual Spanish-English edition of the pocket Constitution. Launched

as part of Hispanic Heritage Month, thebilingual pocket Constitution brings thefounding documents of the United Statesto new citizens who don’t yet read Eng-lish, or who want to use the English andSpanish texts on facing pages to improvetheir understanding of English.

The pocket Constitution can be pur-chased at major bookstores and onlinebooksellers. It’s also available at someNational Park Service stores and hasbeen a big seller at Restoration Hard-ware. Many people have bought copies in bulk to give to friends, family, cus-tomers, schools, and others.

Earlier this year, a bilingual Arabic-English edition was prepared and distrib-uted in Iraq.

Copies of both the original editionand the Spanish-English edition can bepurchased at bookstores or from www.cato.org/constitution. Or call 800-767-1241 for prices on bulk orders.

❝ The Cato Institute publishes smart, slip-in-your-pocket size editions of the Declaration of Independence and the U.S. Constitution, just in case you

need reminding of what the country is really built on.❞— VANITY FAIR

Now in Spanish and Arabic

Take a minute toconsider a gift thathasn’t gone out ofstyle in 200 years.❞

❝

— WALL STREET JOURNAL

In April, Sen. Trent Lott (R-MS) brought out his pocket Constitution to debate Sen. Charles Schumer (D-NY) on ABC's This Week.

At a Capitol Hill press conference in 1998 after the Supreme Court rejected the line-item veto, Sens. Carl Levin (D-MI) and Robert Byrd (D-WV) cite their pocket Constitutions as Sen. Pat Moynihan (D-NY) looks on.

Aviator portrays entrepreneur Howard Hugh-es as a risk-taking visionary who was reward-ed for being the first to see new opportunities.

◆June 16: The Enron accounting scandal led tosweeping changes in the laws governing majorU.S. securities. At a Book Forum, After Enron:Lessons for Public Policy,Cato chairman WilliamNiskanen suggested that Enron collapsed becauseof bad financial decisions and that bad account-ing merely hid the problem from the public. TheSarbanes-Oxley Act makes the government respon-sible for preventing future problems, but Niska-nen recommended that the exchanges set theirown standards according to the needs of theirinvestors. Business columnist Steve Pearlstein ofthe Washington Postwarned that Sarbanes-Oxleycan only catch violators after the fact, and for-mer SEC commissioner Laura Unger agreed thateffective policing would require a change incorporate culture and ethics.

◆June 17: At a Cato City Seminar in SanFrancisco on “Liberty, Technology, and Pros-perity,” radio personality Gene Burns askedwhy politicians of both parties seem to haveforgotten the meaning of the Constitution.Cato president Ed Crane similarly lamentedthe hypocrisy of elected officials who claim toembrace the Constitution but vote in favor ofcampaign finance reform and other laws thatviolate Americans’ constitutional rights. JimHarper, Cato’s director of information policystudies, urged the audience to be vigilant aboutnew technology that governments can use toidentify and track citizens. Finally, Joel Gar-reau, author of the new book Radical Evo-lution: The Promise and Peril of Enhanc-ing Our Minds, Our Bodies—and What ItMeans to Be Human, discussed how genet-ics, robotics, and nanotechnologies will affecthuman evolution, for better or for worse.

◆June 28: Did Ronald Reagan’s presidencypave the way for the economic, social, and tech-nological advances we enjoy today? At aCato Book Forum on The Eighties: Ameri-ca in the Age of Reagan, author John Ehrmanargued that drastic tax cuts and deregulation ofmajor industries have led to major innovationssuch as the Internet and low-cost air travel. Catochairman William Niskanen laid out the majorsuccesses and failures of Reagan’s supply-sideeconomic theories and argued that Reagan-era

of Cato University, “The History and Philoso-phy of Liberty and Power,” learned from lead-ing historians about the long struggle for libertyand limited government. Stephen Davies of Man-chester Metropolitan University in Great Britainemphasized just how lucky we are to live in anera of unprecedented wealth. Many promisingcivilizations were snuffed out by war, stagnation,or natural forces before Europe managed to beatthe odds and become wealthy, he said. JeffreyRogers Hummel of San Jose State Universitydescribed the struggle against slavery and arguedthat slavery could have been ended without thehorrible bloodshed of the Civil War. Cato seniorfellow Jim Powell dubbed Woodrow WilsonAmerica’s worst president because of his cata-strophic decision to involve the United States inWorld War I. Cato executive vice president DavidBoaz told the story of George Washington, the

◆June 1: We can learn a lot about the glob-al economy by following the journey of ahumble T-shirt as it makes its way from rawmaterials to finished product and then intothe second-hand clothing market. At a CatoBook Forum, The Travels of a T-Shirt in theGlobal Economy: An Economist Examinesthe Markets, Power, and Politics of WorldTrade, author Pietra Rivoli of GeorgetownUniversity noted that dozens of diverse peo-ple all over the world cooperate to produceclothing for American consumers. Howev-er, she said, the T-shirt market is still subjectto cotton subsidies, trading rules to advan-tage well-connected companies, and otherpolitical interventions. Adam Davidson ofNational Public Radio praised Rivoli’s abil-ity to tell engaging stories that illustrate larg-er lessons about international trade.


John Stossel goes to Capitol Hill—three times

How a T-Shirt Illustrates Global Trade

Cato Events

Pietra Rivoli, author ofThe Travels of a T-Shirt inthe Global Economy, dis-cusses how people allover the world who maynot agree about politicsor religion cooperate toproduce clothing. DanIkenson of Cato’sCenter for Trade PolicyStudies chairs theForum.

◆June 2: Any intelligent discussion of healthcare reform requires a solid understanding ofthe economic concepts that underlie the healthcare debate. At a Capitol Hill Briefing, “TheMarket for Health Care and Health Insurance:Can the Government Improve It?” Peter VanDoren, editor of Cato’s Regulation magazine,offered a crash course in health care econom-ics, explaining adverse selection, moral hazard,and expected value. Insurance is designed totransfer risk from risk-averse consumers to risk-neutral corporations, not from young to old orfrom healthy to sick consumers. He suggestedthat insurers be more explicit about the costsand benefits of health care decisions, encour-aging patients to forgo procedures with veryhigh costs and only marginal benefits.

◆June 2–5: Participants in the summer session

man who set the precedent for term limits inAmerica by walking away from power after eightyears.

◆June 14: Hollywood loves to pit corrupt busi-nessmen against heroic government officialsacting in the public interest. But recently moviesand television shows friendlier to marketsand individualism have arisen in reaction tothat tired formula. Paul Cantor, an English pro-fessor at the University of Virginia and authorof Gilligan Unbound: Pop Culture in the Ageof Globalization, offered three examples atan evening Cato Forum, “Libertarianism inContemporary Pop Culture.” Cantor specu-lated that South Park and The Incredibles mayfly under the cultural radar, exploring themesand raising ideas that would be too contro-versial for live actors. He also noted that The

the lead in countries like North Korea. Rens-selaer Lee of the Foreign Policy ResearchInstitute recommended an intelligence-basedsecurity policy focusing on reducing opportu-nities and incentives for theft. Cato’s directorof defense policy studies, Charles Peña, warnedthat a successful combined threat-reductionstrategy must encourage other countries to beresponsible for setting their own safeguards.

◆June 30: The reelection rate for membersof the House of Representatives in the 2004election was 98.4 percent; the Supreme Sovi-

et legislature had high-er turnover. At a Capi-tol Hill Briefing,“Incumbents, Uncom-petitive Elections, andAmerican Democra-cy,” Cato Institute sen-ior fellow PatrickBasham suggested thatsuch stagnancy in Con-gress is a result ofincumbent advantagessuch as wide access tothe media, free postalfranking, and the abil-ity to bring home pork.Attempts to controlelectoral corruptionthrough limits on cam-paign donations actu-ally exacerbate theproblem because they

policies have spurred America’s rapid economicgrowth in the last two decades.

◆June 29: Politicians of both parties have got-ten into the habit of making promises they can’tpay for. At a Capitol Hill briefing, “A Minor-ity Viewpoint: The Need to Battle BipartisanSupport for Big Government,” Stephen Slivin-ski, Cato’s director of budget studies, bemoanedthe lack of fiscal responsibility that will bur-den future generations of workers with thecosts of programs to benefit current Ameri-cans. Rep. Jim Cooper (D-TN), policy chair-man of the Blue Dog Coalition of moderateDemocrats, outlined his group’s plans to encour-age responsibility by requiring cost estimateson all spending bills, roll call votes on majornew expenditures, and a 2.1 percent cap on allnew spending. Cato senior fellow JagadeeshGokhale noted that reforms must allow forchanging future needs but that Congress shouldnot be allowed to hide costly long-term spend-ing by using short-term budgeting.

◆June 29: Is it possible to secure the world’snuclear weapons and materials to prevent nuclearterrorism? At a Cato Institute Policy Forum on“Locking Down Loose Nukes,” Rose Gotte-moeller, senior associate at the Carnegie Endow-ment for International Peace, proposed that theRussian government, which has experiencesecuring nukes in the former USSR, should take


limit the ability of challengers and advocacygroups to get their message out to voters.Republican strategist David Carney lament-ed the steady decline of issue-based cam-paigning, stating that entrenched politiciansno longer appeal to voters with a coherentplatform of values and ideas. Nonpartisanredistricting would allow for a greater num-ber of competitive races, he said, and limit-ing the ability of politicians to use the privi-leges of elected office to aid their campaignswould give American voters a more real choicein their political representation.

◆July 8, 15, and 22: Cato’s Capitol Hillfilm series for interns this year featuredthree films by ABC News correspondentJohn Stossel. “Greed” explores whetherself-interest is bad for society, pointing outthat greed can be a powerful spur to hardwork and entrepreneurship. In “Is Amer-ica #1?” Stossel finds that America’s suc-cess is the result of its freedom and thatother nations’ living standards rise as democ-racy grows. Finally, in “John Stossel Goesto Washington,” Stossel exposes govern-ment waste and incompetence and showshow private solutions can often succeedwhere government programs have failed.

◆July 20: In local politics today, some of themost powerful lobbyists for increased gov-ernment spending are people who make theirliving off government programs. As Steven

Continued on page 8

Cato president Edward H. Crane (right) talks with Benefactors Scott and Vanessa Barbee at the CatoUniversity seminar, “The History and Philosophy of Liberty and Power,” held in Washington June 2–5.

Actress Dixie Carter, best known as Julia Sugarbaker on Designing Women,visited Cato for lunch while she was in Washington to appear in Oscar Wilde’splay Lady Windermere’s Fan. Carter and Wilde fan David Boaz hosted.

he argued can increase access to piped waterfor those who need it most. Wenonah Hauterof Public Citizen disputed the facts of Segerfeldt’sbook, claiming that privatizing water distri-bution leads to higher prices and that propo-nents of privatization are attempting to dis-mantle traditional village life. However, Segerfeldtresponded with evidence that private networkwater prices average one-twelfth of the pricecurrently paid by the poorest citizens. His bookincludes numerous examples of countries whereprivatizing water has increased access and savedlives.

◆July 27:The federal fuel tax is meant to pay fornecessary Interstate highway expansion. At aCato Institute Capitol Hill Briefing, “An ExitRamp for States: A Proposal to Let States OptOut of the Federal Fuel Tax,”Rep. Scott Garrett(R-NJ) sponsor of the Surface Transportationand Taxation Equity (STATE) Act, pointed outthat road capacity and repairs have not kept upwith growing demand over the last 50 years. TheSTATE Act would allow states to keep theirfuel tax income and make local infrastructuredecisions at the local level. Transportation econ-omist and author Gabriel Roth criticized the fed-eral government’s use of highway funding to con-trol states and redistribute wealth while ignoringthe unique needs of each state. ■

the need to instill shared values in allchildren—and demonstrated how for-eign models avoided them. John Mer-rifield, an economics professor at theUniversity of Texas–San Antonio, saidthat the biggest problems in foreignschool choice systems are caused byheavy government oversight. Finally,Patrick Wolf of Georgetown Universi-ty pointed out that school choice in coun-tries that have it is considered a humanright, not a political program: once fam-ilies are given a choice in their children’seducation, they will take it for grantedthat it should always be so.

◆July 21:Even in the panicked days afterthe 9/11 terrorist attacks, members ofCongress had the foresight to build a sun-set provision into the USA PATRIOT Act,the law designed to give government agen-cies additional tools to detect and preventterrorism. This summer, Congress helda vote on renewing key provisions of thatlaw. At a Capitol Hill Briefing, “The USA Patri-ot Act: Renew, Revise, or Repeal?” Tim Lynch,director of the Cato Institute’s Project on Crim-inal Justice, posited that the arguments in favorof renewing the law wholesale ignore the fact thatit has produced no measurable results and comesat the expense of many of our most cherishedcivil liberties. Rep. Jeff Flake (R-AZ) detailedsome of the most troubling provisions of the act,including warrantless searches, a lack of oppor-tunity to challenge subpoenas and arrests, andgag provisions preventing the public from review-ing how it has been used. Former representativeBob Barr (R-GA) called for more stringent over-sight and higher burdens of proof for federalagencies—many of which have nothing to dowith protecting against terrorism—conductingsecret investigations of U.S. citizens.

◆July 21: Twenty-two people die each minutebecause of lack of access to clean, safe drink-ing water. At a Cato Institute Book Forum,Water for Sale: How Business and the Mar-ket Can Resolve the World's Water Crisis,author Fredrik Segerfeldt of the Confederationof Swedish Enterprise laid out the major prob-lems of water distribution in developing nations:little investment in infrastructure, inadequatepublic financing, lack of property rights, andprice distortions. Privatizing water networks,

Malanga, senior fellow at the Manhattan Insti-tute, argued at a Cato Institute Book Forumfor his book, The New New Left: How Amer-ican Politics Works Today, activists work-ing on behalf of government-funded socialservice workers are trying to defeat budgetand welfare reform proposals. American Uni-versity professor David Lublin commentedthat the Democratic Party has become “theparty of the permanently poor rather than theparty of the aspiring” by focusing on the indi-gent instead of middle-class voters.

◆July 21: In the United States, foreign prod-ucts and foreign social sentiments are popu-lar; however, some of the most successful inter-national policy innovations have largely beenignored. At a Cato Institute Book Forum, WhatAmerica Can Learn from School Choicein Other Countries, several of the book’s con-tributors offered comments on how Ameri-can schoolchildren could benefit from the kindsof programs that have worked in Sweden, Den-mark, Chile, Australia, and other foreign coun-tries. Andrew Coulson examined severalpopular objections to school choice—amongthem, the lack of capacity in private schools,fear that students will become Balkanized, and


EVENTS Continued from page 7

Moeletsi Mbeki, a South African businessman and brotherof President Thabo Mbeki, discusses his Cato paper on theneed for property rights, entrepreneurship, and free trade inAfrica at a June 28 luncheon for policymakers and scholars.

Fredrik Segerfeldt, author of Water for Sale, tells aJuly 21 Policy Forum audience that water marketscan bring clean, safe drinking water to many of thebillion people who currently lack access to it.

I’d just published an argument for pri-vatization of education, Reclaiming Edu-cation, and was wrestling with the criti-cism from even sympathetic readers thatwhat I’d argued might be good for the mid-dle classes, or richer countries, but whatabout the poor, especially in poor coun-tries? That criticism bothered me. I knewfrom my reading of E. G. West’s book Edu-cation and the State that the poor in Vic-torian England were largely provided forby private education, before the state gotinvolved. Why wouldn’t the same be trueof the poor today? Out of curiosity, I leftmy work—looking at private schools forthe elite and middle classes—and took anautorickshaw into the slum areas behindthe imposing 16th-century Charminar inthe center of the Old City. And to mysurprise, I found private schools on almostevery street corner. Inspired by that, I grewto know many of the school owners, teach-ers, parents, and children; I learned of theirmotivations and difficulties and theirsuccesses and requirements.

Since then I have found private schoolsin battle-scarred buildings in Somalilandand Sierra Leone; in the shanty town ofMakoko built on stilts above the Lagoslagoons in Nigeria; scattered among thetin and cardboard huts of Africa’s largestslum, Kibera, Kenya; in the teeming town-ships perched on the shoreline of Accra,Ghana; in slums and villages across India;among the “floating population” in Bei-jing; and in remote Himalayan villages inChina. Indeed, I have yet to find a devel-oping country environment where pri-vate schools for the poor don’t exist. Myteams have combed poor areas—slumsor shanty towns in and around the majorcities and villages inhabited by peasantfarmers and fishermen—going down everylane and alleyway, asking people in mar-ketplaces and on the streets where the poorare sending their children to school. Andwhile we’ve been conducting the censuses,we’ve been finding out as much as possi-ble about the schools, what their facilitiesare like, whether teachers are teaching,building up a comprehensive picture of theprivate schools and comparing them with

public schools. When our researchers havecalled unannounced in the classroom, inevery case they have found significantlymore absenteeism among the public schoolteachers than among those in the privateschools. And when teachers are present,the researchers found much higher levelsof teaching activity in the private than inthe public schools.

Fourth, we have found considerable sta-tistically significant differences in inputsbetween the public and private schools.The pupil/teacher ratio is lower in the pri-vate than in the public schools—with theunregistered private schools usually hav-ing the lowest of all—and school facilitiessuch as libraries, toilets, and drinking waterare usually better provided in the privatethan in the public schools.

Fifth, there are differences between coun-tries in the relative costs of public and pri-vate schooling. In countries where publicschooling is entirely free at the point ofdelivery—India for instance—clearly, theprivate schools cost more for parents. Butin other countries—China and Ghana, forinstance—where public schools charge lowfees or “levies,” we find that sometimesthe private schools are undercutting pub-lic schools, because the really poor can’tafford the public option. What makesthe private schools financially attractive isthat they allow the parents to pay on a dai-ly basis—perhaps 10 cents a day—ratherthan to pay for the full term up-front asthey must for the public schools, eventhough this might work out more cheap-ly if they could afford to pay it. In Kenya,the government has recently introduced“free primary education,” but our inter-views with parents point to many “hiddencosts” of public schools, such as the require-ment for full uniforms, which mean that,in practice, private slum schools often turnout to be less expensive.

Sixth, private school owners themselvesare very much aware of the plight of thepoorest of the poor: for those parents whoare too poor to send their children to pri-vate school, or as an aid to those chil-dren who have been orphaned or who arefrom large families, the school entrepre-neurs themselves—in nearly 20 percent of

the government alternative. Then, mostimportant of all, we’ve been comparing theachievement of students in the private andpublic schools serving the poor areas; test-ing a stratified random sample of 4,000children in each country, chosen equallyfrom registered private, unregistered pri-vate, and government schools; and usingadvanced statistical techniques to controlfor as many background variables as wecan, to find out whether the poor are bet-ter served by public or private education.Although the study is ongoing and addi-tional findings are anticipated, there areseven themes that have emerged from thedata that I can report on in general terms.

Seven Features of Private Education for the Poor

First, there are startling facts aboutthe private-sector provision of schoolsfor the poor. In each of the poor areas stud-ied in detail, we’ve found that a large major-ity of the schools serving the poor areprivate, with either a large majority or asubstantial minority of poor parents tak-ing the private option.

Second, contrary to expectations, wefind that the majority of private schoolsare run not as philanthropic endeavors butas businesses. Those private schools arecreated largely by local entrepreneursresponding to the needs in their commu-nities. In general, after studying the report-ed income and expenditure of the privateschools, we can see that they are profitableinstitutions—which of course helps explainwhy there are so many of them—with thevast majority of income coming from schoolfees rather than, as some might expect, phil-anthropic donations.

Third, there are large differences betweenthe pay and commitment of the teachersin public and private schools serving thepoor. Private school teachers are recruitedlocally from the communities served, unlikepublic school teachers who are bused infrom outside. Teachers in private schoolsare paid considerably less than are teach-ers in the government schools. Yet the pri-vate schools do not in general suffer fromteacher shortages, suggesting that the mar-ket rate for teachers is considerably low-er than that set by teachers’ unions in the


❝Public funding can be part of the problem, not part of the solution.❞

PRIVATE SCHOOLS Continued from page 1

Continued on page 15


CatoonCapitolHill

Cato Institute scholars were very busyon Capitol Hill this summer. DuringJune and July, Cato held five CapitolHill Briefings and three Capitol Hill

programs for interns featuring John Stosselvideos with commentary by Cato scholars.Cato analysts also testified at least eight timesbefore House and Senate committees.

JUNE 16: Ian Vásquez tells the House Subcommittee on Social Security how well privatization has worked in Chile.JUNE 29: Rep. Jim Cooper joins Cato staff in a Capitol Hill Briefing on “The Need to Battle Bipartisan Support for Big Government.”

JULY 13: Jerry Taylor tells a widely publicized HouseArmed Services Committee hearing that a Chinesecompany's purchase of Unocal is not a threat toAmerican energy security.

JUNE 21: William Shipman, cochair of Cato's Proj-ect on Social Security Choice, urges the Housesubcommittee on Social Security to move forwardwith private accounts.


JULY 27: Rep. Scott Garrett discusses his proposal to let states opt out of the highway tax at a CapitolHill Briefing.

JULY 21: Rep. Jeff Flake, former representative Bob Barr, and Cato's Tim Lynch brief congressional staff onrenewal of the Patriot Act.

JUNE 9: Cato’s director of information studies Jim Harper testifies before a House Homeland Security sub-committee that the federal government is doing a poor job of airline security.

JULY 11: CPB head Patricia Harrison, PBS head Pat Mitchell, and Cato executive vice president David Boaztestify before a Senate Appropriations subcommittee on taxpayer funding for NPR and PBS.

JUNE 30: Cato senior fellow Patrick Bashamspeaks at a Capitol Hill Briefing on how our elec-tion laws have protected incumbents and reducedpolitical competition.


We must have real, enforceable spendingcaps. A lot of politicians talk about caps onspending, but their definition of emergencyspending is so broad and vast that the capsare easily circumvented. We need to setaside a rainy day fund that will, it is to behoped, inhibit loose congressional definitionsof emergency spending. A constitutional bal-anced-budget amendment is more contro-versial but harder to get around, and if we’dhad one in place at the start of the Bush admin-istration, we probably would not be in thepredicament that we are in right now.

To hold politicians accountable for theirspending, we need recorded votes on everyappropriations bill and cost estimates beforewe vote. We should go back to holding avote each time we want to raise the debtceiling. Things like that are almost so com-monsensical that it is embarrassing to haveto mention them in the Congress of theUnited States of America in the year 2005.

We are going to look back on this era andask, What on earth were we thinking? Why werewe endangering the future of the greatest coun-try on earth by engaging in such spendthrift,uncontrollable practices without any seemingregret, and in fact with considerable enthusiasm?

The ideal thing for both parties to do wouldbe to embrace spending cuts—real, substantivecuts—now, before the election. They must faceup to the reality that they often voice rhetorical-ly but seldom risk much for. Programs like theMedicare prescription drug benefit must berepealed, or at least delayed until we can pay forthem. We owe our seniors not an increased moun-tain of debt but real benefits that are really paidfor. And we owe it to our grandchildren not totransfer to them the bills for our spending.

Steven Malanga: Here in Washington, D.C.,we look at the 2004 election and we talk aboutthe importance of voters expressing their val-ues. We talk about the importance of the warin Iraq. But state, county, and city govern-ments in America have priorities that are vast-ly different from those in Washington.

The shift in focus in local government is con-trolled by the rise of a political party that is nei-ther conservative nor liberal in the traditionalsense; it is, rather, a party of those who benefitfrom an ever-expanding government. For 50years, they have increasingly shaped and influ-enced municipal and state budgets in fundamental

you pass an entitlement program it can never berepealed. But we’ve repealed irresponsible spend-ing before, including the catastrophic health careentitlement program, and we can do so again.

In another example of reckless budget-ing, the war in Iraq has been conducted almostentirely off-budget. It is not even mentionedin the president’s budgets. It is scandalousthat our troops run out of money well beforethe end of the fiscal year and must beg formore money to tide them over. This admin-istration claims to be pro-defense, but it israiding every other account in the Pentagonyear after year to come up with the fund-ing needed to supply our troops.

We are looking for devices to force politiciansto do the right thing. Those of you who are not

historians may not know that it took Americaalmost 204 years to accumulate $1 trillion indebt, and now we add another trillion every yearor two. Both parties are responding to this cri-sis with proposals for budget process reformsinstead of substantive spending cuts. And eventhose measures have been delayed because themajority can’t agree on what package of reformsto pass. The Blue Dog reform package is a 12-step program to get our nation off its drunkenspending binge. And like a typical AA program,the first step is to admit that we have a problemand talk openly about it. We need a bipartisanconsensus that, as individuals and as a nation,we must live within our means.

The Cato Institute hosted several eventsthis summer on the need to reduce gov-ernment spending. At a June 29 CatoInstitute Hill Briefing, “A Minority

Viewpoint: The Need to Battle BipartisanSupport for Big Government,” Rep. JimCooper (D-TN), policy chairman of the BlueDog Democrat Coalition, and Stephen Slivin-ski, Cato’s director of budget studies andauthor of “The Grand Old Spending Party:How Republicans Became Big Spenders”(Cato Institute Policy Analysis no. 543), par-ticipated in a discussion on reining in feder-al spending. On July 20, Manhattan Insti-tute senior fellow Steven Malanga, authorof The New New Left: How American Pol-itics Works Today, spoke about how stateand local politics is controlled by big spenders.Excerpts from their remarks follow.

Jim Cooper: Both parties have fallen downon their responsibility to reduce our fed-eral budget deficits, ideally by controllingspending. Comptroller General David Walk-er deemed 2004 the worst year in our fis-cal history because politicians promised$13 trillion in spending over the next 75years, and none of it is paid for.

The entire federal budget process this year—from the first look at the $2.6 trillion pack-age to the final vote—took about two hours.By the end of the Bush administration, we willbe spending nearly as much money on servic-ing the national debt as on all nondefense dis-cretionary spending combined.

The budget process reform package that theBlue Dog Democrats have put forward rests ona requirement to pay for current programswith current spending, or “PAYGO.” We needto reinstitute real two-sided PAYGO, which meansthat any spending increase or a tax must be off-set by reductions in spending or increased rev-enue elsewhere. That really should not be an ide-ological battle. We had PAYGO from 1990 to2002, and Alan Greenspan can even rememberthe day that Congress let PAYGO expire.

Perhaps the single most irresponsible piece oflegislation ever passed by Congress was the $8.1trillion Medicare prescription drug bill. The Amer-ican people must be alerted to the danger oftrillions of dollars of promised, unfunded spend-ing. Unfortunately, by the time Americans under-stand the danger, it will probably seem politi-cally too late to fix it. It’s easy to believe that once

Policy Forum

Budget Reform at Every Level

Jim Cooper: “If we’d had a constitutional bal-anced-budget amendment in place at the start ofthe Bush administration, we probably would notbe in the predicament that we are in.”


ally slowly getting socialized medicine.That has turned large portions of health

care’s huge workforce—which has grownfrom about 4 percent of the private-sectorworkforce in the United States in the 1960sto 10 percent today—into advocates formore spending on government-financedhealth care at taxpayers’ expense.

While it may seem great that health care isgrowing so quickly, economists can see thatthe spending is all tax money and that it costsus more than we benefit from it. And the inter-est groups lobbying to increase spending haveforced cities such as New York to keep expand-ing their budgets even in the midst of steeprecessions. We have had to keep taking mon-ey out of the private sector to keep feeding thegrowth of this public-sector economy.

We have come a long way from the days ofthe old new left, which idealistically, if some-what naively, believed that a paternalistic gov-ernment could solve many of our social andeconomic problems if we just spent enoughmoney on them. The present enormous pub-licly supported workforce, the livelihood ofwhich depends on a bigger and ever-expand-ing government, has grown big enough andstrong enough in most states to play an impor-tant role nationally. This “new new left” willlead the charge for the federal government topay the bills when state budgets explode, andit’s already succeeding. In the post-9/11 reces-sion, the federal government spent $20 billionrescuing state Medicaid programs from thecosts of their 1990s spending sprees.

The bills for public-sector spending arecoming due in states and cities, and we arestarting to see the fiscal stress and the polit-ical storm that have been kicked up in Cal-ifornia and New Jersey. The governor ofNew Jersey has admitted that even thoughit is one of the wealthiest states, with thehighest state and local taxes in the nation,it has given away too much to public-sec-tor employees and cannot pay its bills any-more. States have borrowed money to payfor expansive public spending, and futuregenerations will be paying the price.

Those whose livelihoods are based onthe expansion of government see their states’funding drying up, and so they are tryingto make the leap to spending at the nation-al level. It is part of a political calculation

ways that often impose steep costs on taxpayers,costs that are not so easily unraveled. Those pub-lic-sector advocates have successfully pursued anagenda of higher taxes, more spending, and socialand regulatory legislation at the local level.

In New York, for instance, the healthcare workers’ union and the teachers’ unionrun radio ads every spring warning thatif we dare to cut the state Medicaid budg-et or education funding, there will be apolitical cost and dire consequences forchildren and the poor. In California rightnow, public-sector unions have alreadyspent an estimated $20 million on adver-tising fighting Governor Schwarzenegger’sreform agenda, and they have publicly pro-claimed that they plan to spend an addi-tion $50 million on that campaign.

This new political reality began in the late1950s and the mid-1960s when we beganto see the formulation of the War on Pover-ty. The people who began our anti-povertyprograms had the fundamental attitude thatthe American federal government needednot only to funnel billions of dollars to helpthe poor but also to empower communitiesby letting local governments decide how tospend it. Local governments, in turn, hand-ed out the money to a wide array of emerg-ing groups, from community developmentorganizations, to nonprofit housing groups,to government-supported drug rehabilita-tion centers.

In a short time, the federal government’s mon-ey created a panoply of publicly financed socialadvocacy groups that gradually learned that theirsurvival lay in keeping the government fund-ing faucet open. At the same time, public-sectorworkers were given the right to collectively bar-gain, creating unions and interest groups of gov-ernment employees who lobby for more mon-ey to keep and expand their jobs.

In the process of developing social programs,the government also transformed many tradi-tional charitable groups, which formerly hadfinanced their programs through donations, intogovernment contractors living increasingly off ofpublic money. For instance, in the 1960s CatholicCharities, one of America’s largest charities,received less than 10 percent of its money fromgovernment. Today about 60 percent of its rev-enues come from government.

Those interest groups quickly realized thatthey had to become politically active. They

began mobilizing their clients to demand moreservices and oppose cutbacks. They spawnedactivists who began running for office andwere elected on a big-government agenda.And as their numbers grew, they became apowerful voting bloc. In New York City, forinstance, social service jobs in the mid-1970stotaled about 50,000 positions. Today, thereare nearly 200,000, mostly government-supported, social service jobs in New YorkCity, more jobs than exist on Wall Street.

As the War on Poverty got under way, theJohnson administration changed the nature ofhealth care in this country with two massivegovernment programs, Medicaid and Medicare.The term “health care” didn’t exist in theearly 1960s; it was called “medicine.” Medi-

cine has now been transformed; it’s the provincenot of doctors but of economists. Hospitalsnow oppose reforming state Medicaid andMedicare with claims that lowering publicspending would destroy jobs, in effect arguingthat health care is not a medical program buta jobs program.

Today, with the growth of Medicaid andMedicare as well as that of related programssuch as Family Health Plus and Child HealthPlus, government pays more than half of allhealth care bills in the United States, and inthe places where Medicaid and Medicare pro-grams are the largest, the percentage is farhigher than 50 percent. In effect, we are actu-

❝It took America almost 204 years to accumulate $1 trillion in debt,and now we add another trillion every year or two.❞


Steven Malanga: “The government transformed manycharitable groups into government contractors liv-ing off of public money. Those interest groups beganmobilizing their clients to demand more services.”


that we are only slowly coming to under-stand and deal with. We will need fiscalresponsibility at all levels of governmentto protect our budgets from the interestsof those who make their living doing goodon the public dime.

Stephen Slivinski: You might recall a speechby Bill Clinton in which he said, “The era ofbig government is over.” There has been somedisagreement about whether that statement istrue. I think it is, but not for the obvious rea-sons. I think the era of big government is over.The era of even bigger government has begun.

I think I might prefer the era of big gov-ernment to what we have currently, and oneof the reasons I wrote “The Grand Old Spend-ing Party” is because the numbers really dospeak for themselves. George W. Bush is thebiggest spending president since Lyndon B.Johnson, after adjusting for inflation andtaking defense spending and entitlement pro-grams out of the equation.

Total government spending grew by 33percent during George Bush’s first term, andI wondered why that was the case. Republi-cans always talk about being fiscally respon-sible and fiscally conservative, trying to putforward ideas that restrain government. Partof the problem is that we now have a unitedgovernment. Both ends of Pennsylvania Avenueare controlled by Republicans. When youthink about what the Founders of the nationhad in mind when they created a bicamerallegislature and then divided power among thethree branches, you start to notice that maybethere is something to be said for gridlock, hav-ing one party in the majority in Congress fight-ing the other party in the White House.

Gridlock actually makes people stick totheir principles much more vigorously thanthey have lately. Gridlock resulted in a declinein spending as a percentage of GDP. It does-n’t necessarily imply net declines in spending,but it has led to a leveling off of spending toallow the economy to catch up with newexpenditures. And so government shrank asa percentage of the overall economy.

What you are seeing now is unfortunatelyan environment in which there are no checksand balances. If Bush presented a budget thatgrew by only 3 percent and Congress pre-

tion without representation.Even in the short term, deficits and debt

hide the true cost of government from tax-payers. If the people’s tax burden does notequal the costs of current expenditures, politi-cians are essentially able to promise variousand sundry goodies for free, because voterscannot see the full cost that might dissuadethem from voting for people who wouldincrease government spending even further.

Restraining spending on current programsis really just half the problem. We alsohave to reform the budget rules so that thereare incentives not to create new governmentprograms. Government programs do takeon a life of their own. As Ronald Reaganonce said, “A government program is thenearest thing to eternal life we’ll ever seeon this earth.”

I think there could be a bipartisan solu-tion to the government spending problem.And part of that solution comes from thereform-minded members of Congress onboth sides of the aisle, such as the Blue DogDemocrat Coalition and the RepublicanStudy Committee. The goal is to encour-age spending control and to put into placerules that will affect the budget process andallow spending to be restrained.

There could be a bipartisan agreement tocap increases in discretionary spending forthe next three fiscal years at 2.1 percent, asproposed by the Blue Dogs. The Congres-sional Budget Office should prepare a costestimate for every bill that comes to the floorto make sure it fits under the cap. Congres-sional agencies should not get new budgetsuntil they can at least pass an audit.

To hold members of Congress responsiblefor their spending, make them show how muchspending they are supporting by forcing rollcall votes on any bill above $50 million, whichwould include most of the omnibus spendingbills used to hide local pork projects. MakeCongress justify the money it is spending. Andgive members of Congress time to read the finaltext of legislation before they have to vote.

Those kinds of incentives need to be putforward on the spending side. There hasnot been any attempt to do so until now,and I think a hearing or a series of hear-ings on budget growth and the problemswith the budget right now would do a lotto get us started. ■

sented a budget that grew by 7 percent, andthe president then vetoed that budget andforced them to come back with another onethat featured more vigorous fiscal control, Iwould not be telling this story. The problemis that Bush has sent Congress budgetsproposing 7 to 8 percent spending growthper year. Members of Congress add pet proj-ects for their own districts and states andsend the budget back to the president. Thepresident has not vetoed a single bill yet, nomatter how big the expenditures.

In that respect, Congress and the exec-utive are trying to outdo one another bygiving their constituencies more and morespending. The price for that failure to con-

trol the budget is about $91 billion. Thatis the amount above and beyond what thepresident proposed in nondefense discre-tionary spending that Congress added tothe president’s budget and that PresidentBush did not veto when he had the chance.

Spending is driving this problem. Therehas been some argument on both sides ofthe aisle about whether the tax cuts orspending increases caused the problem.Certainly they both contributed, but spend-ing caused more of the problem.

Deficits really are bad in and of them-selves because they saddle future generationswith the cost of spending in the present. Itis immoral to burden future workers withthe costs of our programs. Some observersmight even call this intergenerational taxa-

❝Total government spending grew by 33 percent during George Bush’s first term.❞

POLICY FORUM Continued from page 9

Stephen Slivinski: “The era of big government isover. The era of even bigger government has begun.”

chain of accountability is much weak-er, as teachers have a permanent jobwith salaries and promotions unrelat-ed to performance. This contrast is per-ceived with crystal clarity by the vastmajority of parents.

Indeed, such was the view of the relativemerits of public and private schools that“most parents stated that, if the costs of send-ing a child to a government and private schoolwere the same, they would rather sendtheir children to a private school.”

That poor parents in some of the poorestcountries on this planet are flocking to pri-vate schools because state schools are inade-quate and unaccountable seems to be hugelysignificant territory for these development expertsto concede. The more I read of this evidence,the more it seems that these development expertsare missing the obvious conclusion to be drawnfrom it. If we are concerned with reaching the“education for all” target of all children in qual-ity primary education by 2015, surely we shouldbe looking to the private sector to play a sig-nificant role here. Surely we should be trum-peting its successes and seeking ways of help-ing its improvement as a major response to theneeds of education for all—that is, to go withthe grain of current parental choice and thinkabout the potential of private education to meetthe educational needs of all.

Four Areas of Substantial DisagreementCuriously to me, however, that is not a

possibility currently being explored by devel-opment experts: Oxfam’s report is typical.Although, as noted, it is quite explicit thatprivate schools for the poor are emergingand that those schools are superior to gov-ernment schools for the poor, its fallbackposition is that “there is no alternative”but blanket public provision to reach edu-cation for all. The only message from thedevelopment experts appears to be that par-ents are misguided in making choices in favorof the private sector and that their progenyshould be dragged back into governmentschools. Why is that the case?

The Probe Report gives four reasons,which seem to be shared by the mainstreamdevelopment view. It concedes that, althoughit has painted a “relatively rosy” picture of

ties, one finds parents who make great sac-rifices to send some or all of their childrento private schools, so disillusioned are theywith government schools.

Second, among the same experts, it seemsto be common currency that the reason whypoor parents are sending their children toprivate schools is, at least in part, the grossinadequacies of state education, especiallyteacher absenteeism. The Oxfam EducationReport states clearly that it is the “inade-quacies of public education systems” thathave “driven many poor households into pri-vate systems.” Those inadequacies include“inadequate public investment,” causing staffand pupil demoralization and the provi-sion of poor facilities. Most important, how-ever, says the report, is the problem of teacherabsenteeism and commitment. The Probeteam reported that when their researcherscalled unannounced on their large randomsample of government schools, in only 53percent was there any “teaching activity”going on at all! In fully 33 percent the headteacher was absent. The report gives sometouching examples of parents who are strug-gling against the odds to keep children inschool but whose children are clearly learn-ing next to nothing. The Probe team observedthat in the government schools, “generally,teaching activity has been reduced to a min-imum, in terms of both time and effort.” Sig-nificantly, “this pattern is not confined to aminority of irresponsible teachers—it hasbecome a way of life in the profession.”

Those problems were not found in pri-vate schools serving the poor. When the Proberesearchers called unannounced on their ran-dom sample of private unaided schools inthe villages, “feverish classroom activity”was taking place. Indeed, private schools forthe poor, the Oxfam report says, some-times “offer cheaper and better-quality alter-natives to State provision.”

So what is the secret of success in the pri-vate schools? A third proposition seems to gainwidespread agreement among the developmentexperts. The Probe Report put it succinctly:

In a private school, the teachers areaccountable to the manager (who canfire them), and, through him or her, tothe parents (who can withdraw theirchildren). In a government school, the

all places in one Indian sample and nearly10 percent in the Nigerian sample—offerfree or subsidized scholarships.

Finally, our first results on the achieve-ment of pupils show that the private schoolssubstantially outperform the public schoolsin mathematics and English, after control-ling for the school choice process and for arange of background factors. All this is forconsiderably lower per pupil costs. If ourresults withstand scrutiny, then it would seemthat the poor are making sensible choices bysending their children to private, rather thanpublic, schools.

Three Surprising Areas of Agreementwith Development Experts

The odd thing is, it turned out that my“discovery” was not a discovery at all but aphenomenon that was actually quite wide-ly known, at least by some key figures indevelopment circles. But no one seemed tobe drawing the obvious conclusion. Instead,those influential in development circles seemedto be engaged, if not in a conspiracy of silence,then at least in a refusal to explore the impli-cations of where the evidence seemed to lead.In development circles, all were repeatingthe same refrain that “education for all”required government intervention, assistedby international agencies; the presence ofprivate schools for the poor was irrelevant.

Many development experts seem to haveno problem accepting three propositions thatseem to me to lead in an altogether differentdirection from the one in which the expertssee them heading:

First, it seems to be widely acceptedthat private schools for the poor are bur-geoning. The Oxfam Education Report, forinstance, the Bible of many development edu-cation experts, looking at evidence from arange of developing countries, challenges the“misplaced” notion that private schools serv-ice the needs of only “a small minority ofwealthy parents” and points to the “lowercost private sector” that has emerged to “meetthe demands of poor households.” One ofits sources of evidence is the Probe Reporton education in villages in five northern Indi-an states. That report says that “even amongpoor families and disadvantaged communi-

❝I have found private schools in battle-scarred buildings inSomaliland; in the shanty town of Makoko; in slums and villagesacross India; and among the ‘floating population’ in Beijing.❞




Clearly, the evidence and discussion pre-sented here have implications for U.S. devel-opment policy. But do they have any impli-cations for the school choice debate forAmericans themselves? I believe they do,that the growing body of evidence of schoolchoice among some of the world’s poorestpeople could bring new inspiration andvitality to the school choice movement inthe United States.

Two Lessons for School Choice in AmericaCertainly, the research evidence from

developing countries can put the Ameri-can experience into a wider context, fur-ther undermining the claims of those whoseek to portray the school choice move-ment as the bastion of only the privileged.Innovative models from around the worldof the way private education enhanceschoice and improves opportunities for themost disadvantaged, evidence concerningthe effectiveness of those models in raisingstandards, and stories highlighting the cre-ativity and entrepreneurship of concernededucationists can all play an important rolein helping buttress calls for school choicein America.

However, perhaps the new evidence fromdeveloping countries can go even furtherthan that. Many participants in the schoolchoice debate in the United States currentlyseem to limit their ambitions to the possi-bility of vouchers in education—that is, wheregovernment taxes you, then allows some partof your own money to be transferred to aschool of your choice within strict constraintsset by government. Here it seems to be assumedthat public funding of education at least isa nonnegotiable requirement.

But two far more radical lessons are sug-gested by the evidence emerging from devel-oping countries, which might imply that suchvoices in the American school choice debateare not being bold enough.

The first radical lesson concerns the spir-it of self-help. Here, if a public school isfailing in the ghettoes of New York or LosAngeles, we assume that the only way inwhich the disadvantaged can be helped isthrough some kind of public intervention—through vouchers, or charter schools, orsome other “school choice” proposal. Butthe poor in Asia and Africa don’t sit idly

that they were active choosers, keen tomove their children if the quality of theschool was not what they wanted. Themajority surveyed several schools beforethey chose the one to which to send theirchild.

In any case, even if the quality was poor-er than considered desirable, that would-n’t necessarily lead to a wholesale dismissalof the private schools—for there is, as not-ed, widespread acknowledgment that thegovernment schools have poor-quality pro-vision, and the development experts arelooking to improve them. So even if theProbe team were right, that would at mostimply looking at ways of improving theprivate schools, not of abandoning themas an option for education for all.

But the fourth point seems the oddestto make. What it seems to be saying is thatpoor parents will just have to wait until“things get better.” By removing your chil-dren from the totally inadequate state school,imply development experts, you are jeop-ardizing the state system. It doesn’t matterthat you are poor yourself and that yourchildren’s education may be the only viablevehicle out of poverty; you’d better stay inthe state sector and hope that somethinghappens to make things better. Meanwhile,your children can irrevocably suffer fromteachers who don’t turn up, or who don’tteach if they do turn up, until governmentslearn the lessons from experiments else-where. But don’t, whatever you do, sendyour children to private school!

It seems to me that parents in the slumsand villages may be less sanguine and moreimpatient. Parents may not feel they haveany impact on distant or corrupt politicalprocesses. They may not believe in anycase that politicians can or will effect solu-tions to their problems. Their only realisticalternative might be to exit the state system.Increasingly, it seems to me that progresstoward accountable education might notnecessarily involve complex political process-es and the realignment of power relation-ships. Instead, the lessons coming loudly andclearly from parents using the private sys-tem might be that accountable educationinvolves a very simple and easy transfer ofpower from the politician to the parent, andthat can be done now.

the private sector, where there is a “high lev-el of classroom activity, . . . better utilizationof facilities, greater attention to young chil-dren, responsiveness of teachers to parentalcomplaints,” this does not mean that privateeducation is an answer to the problem ofproviding education for all, because

• private schools are out of reach of thevast majority of poor parents;

• private schools “often take advantageof the vulnerability of parents,” whichthey do by maintaining “appearanceswithout imparting much education tothe children”;

• private teachers’ “overwhelming objec-tive is to cram the heads of the pupils,so that they may pass the relevant testsand examinations,” rather than engagein wider educational activities; and

• if poor parents support private educa-tion, this “carries a real danger of under-mining the government schooling sys-tem.”

The first objection is about fees. Certainlythe schools we’ve examined, while charginglow fees, are out of the reach of some ofthe poorest parents. But why is that seen asan objection to a greater role for private edu-cation? Clearly, there is the possibility of cre-ating targeted vouchers or scholarships forthe poorest, which would overcome the objec-tion. Indeed, as noted above, the privateschools themselves are aware of the needsof the poorest and provide scholarships forthem. So surely a way around the first objec-tion is to follow the lead of the private schoolsby providing public or private targeted vouch-ers, or both, for the poorest.

The second and third criticisms are ofthe quality of private education. But oncloser reading, they did not themselves seemto be based on the evidence in the ProbeReport but at best were subjective judg-ments about the schools. Our research issuggesting that these are not valid criti-cisms. In our detailed study of private schoolsin Hyderabad, for instance, the schoolswere clearly not simply “teaching to thetest” but were engaged in teaching the wholecurriculum and a multiplicity of extracur-ricular activities. Parents reported to us

❝A large majority of the schools serving the poor are private, run notas philanthropic endeavors but as businesses.❞



is happening in developing countries todaymay be that public funding can be part ofthe problem, not part of the solution. Oneparent in our Kenya study put it succinct-ly. He had taken advantage of free publiceducation when it was introduced, takinghis child from a private school in the slumsto a public school on the outskirts of town.However, quickly disillusioned by whatwas offered, he transferred her back to theprivate school. He told us: “If you go toa market and are offered free fruit and veg-etables, they will be rotten. If you wantfresh fruit and vegetables, you have to payfor them.” That parent knew that the school’saccountability to him depended on his pay-ing fees. Perhaps that is a lesson for thosewho want to improve education for thepoor in America. ■

and Africa is that not only can a majorityof the poor that we’ve researched affordprivate education themselves, without stateintervention, but it is precisely their pay-ment of fees that appears to keep the schoolsaccountable to them. And the schools’accountability to parents through fees isthe key difference, noted even by the crit-ics of private education, that keeps stan-dards higher than in the public alternative.If the private schools were to be broughtinto a universal voucher system, as mightbe the ambition of many American pro-ponents of school choice, with state fundsprovided for them on a per capita basis,then this may drastically undermine orremove altogether the ability of parents toensure essential accountability.

The most important lesson from what

by, dispossessed and disenfranchised—adjectives used by the liberal elite to describethe disadvantaged in America—acquies-cent in their government’s failure until out-siders propose some such reform. Instead,some of the most disadvantaged people onthis planet engage in self-help, vote withtheir feet, exit the public schools, and movetheir children to private schools set up byeducational entrepreneurs from their owncommunities to cater to their needs, with-out any outside help. Could the experiencesof parents and educational entrepreneursfrom those poor countries inspire a simi-lar response among disadvantaged com-munities in America too, and among thosewho seek to help them?

Second, and perhaps most important, alesson we can learn from the poor in Asia

❝The message from the development experts appears to be that parents are misguided in making choices and that their progeny should be dragged back into government schools.❞


Pulling Our Heads from the Sandand improved relations with neighboring Arabstates. The European Union has enjoyed somesuccess in negotiating in the Middle East late-ly, including getting Israel and its neighborsto sit at the same table for trade negotia-tions for the first time. Hadar suggests letting

the EU continue in this role, arguingthat negotiations would have more suc-cess if the United States were out of thepicture.

Hadar argued in his 1992 book, Quag-mire: America in the Middle East, thatU.S. policy toward the Middle East wouldlead to a violent response from funda-mentalist Muslims, and sadly, his predic-tion has come true. Having failed to followhis advice then—that we redefine our inter-national interests after the end of the ColdWar—we must now find a way to abandonour outdated Middle East policy. Hadar’sbook is an excellent blueprint for a new strat-egy that will strengthen our friendships withpeaceful allies in the region, extricate us frompotentially dangerous conflicts, and save Amer-ican military and political resources for situ-ations in which we need them to protect gen-uine American interests.

Sandstorm: Policy Failure in the Middle Eastis available ($24.95 cloth) at major booksellerseverywhere or from www.cato store.org. ■

cost of maintaining a U.S. military presencethere is an annual multi-billion-dollar burdenfor Americans.

American intervention in the Arab-Israeliconflict, on the oth-er hand, has large-ly been presentedas a moral imper-ative rather thanan economic one.The United Statesthroughout itshistory hasmaintained aself-image as aprotector ofthe weak andthe innocentfrom globalaggressorswho wishto control them.However, Hadar posits that, inthe case of Israel, American meddling mayactually be making the problem worse. If thereis to be peace in the region, Hadar says, itmust originate with the players in the conflict.Indeed, Hadar contends that U.S. policies indi-rectly discourage the Israelis from seeking ajust and durable peace with the Palestinians

Thomas Jefferson declared in his first inau-gural address in 1801 that the UnitedStates should strive to enjoy “peace,commerce and honest friendship with

all nations; entangling alliances with none.”Unfortunately, says journalist and Cato Insti-tute research fellow in foreign policy studiesLeon Hadar in his new book, Sandstorm: Pol-icy Failure in the Middle East, we have becomehopelessly entangled in the politics of the Mid-dle East, which inhibits our ability to main-tain peace, commerce, and friendship withmany nations in the region.

U.S. policy toward the Middle East,Hadar explains, has been centered aroundtwo distinct assumptions: that the region iscrucial to American strategic energy inter-ests and that the United States can and should“do something” about the Arab-Israeli con-flict. Since the 9/11 terrorist attacks, athird consideration has been added: that mil-itary intervention in the Muslim world is thebest way to stop terrorists. Hadar arguesthat those are the wrong goals for the Unit-ed States to pursue and that our strategy inthe Middle East has undermined our legiti-macy on the global stage.

Washington’s assumption that U.S. militaryprotection was imperative to maintain “cheap”Middle East oil was always faulty. In fact, the

trolling Unconstitutional Class Actions: A Blue-print for Future Lawsuit Reform” (Policy Analy-sis no. 546), the law still fails to secure the con-stitutional rights of classaction defendants and doesnothing to prevent outra-geously large settlements.Congress and the courtshave so lowered the bur-den of proof in many cas-es that plaintiffs’ respon-sibility for their own injuriesbecomes irrelevant anddefendants must pay huge settlements or riskfinancial ruin. Instead of addressing those con-cerns, the Class Action Fairness Act moves cas-es from state to federal courts, removing thedual sovereignty that makes the court systemdynamic and responsive to the changing needsof litigants. Moller proposes reforms that wouldrestore defendants’ constitutional rights to dis-pute plaintiffs’ claims individually, give judgesgreater oversight over the creation of plaintiffclasses, and force plaintiffs to prove the meritsof their claims before they can exert undue pres-sure on defendants to settle.

◆Job Security for PoliticiansOver the past 50 years, the congressional reelec-tion rate has averaged more than 90 percent.In “Uncompetitive Elections and the Ameri-

Mark Moller


can Political System” (Policy Analysis no. 547),Cato senior fellow Patrick Basham and Inde-pendence Institute senior fellow Dennis Polhillreveal that incumbent politicians enjoy bene-fits such as free mailingand travel, media access,and full-time staff thattranslate to an 11-pointadvantage at the polls.Restricting spending bychallengers and outsideinterest groups makesdefeating incumbent can-didates even less likely.Basham and Polhill suggest implementing sev-eral reforms in federal elections that have beenshown to improve competitiveness at the statelevel, including relaxing campaign finance rules,implementing nonpartisan redistricting, andinstituting term limits for sitting politicians.

◆South of the BorderThe U.S. government currently spends nearly$10 billion annually attempting to control immi-gration, and yet an estimated 400,000 illegalimmigrants still find ways to cross our borderseach year. In “Backfire at the Border: Why Enforce-ment without Legalization Cannot Stop IllegalImmigration” (Trade Policy Analysis no. 29),Princeton University professor Douglas S. Masseycontends that there is no way to prevent illegal

The Drug Enforcement Administration,Congress, and the media have led manyAmericans to believe that the grossabuse of prescription painkillers is wide-

spread and that doctors have been criminallynegligent about preventing such abuse. How-ever, as Ronald T. Libby of the University ofNorth Florida explains in “Treating Doctorsas Drug Dealers: The DEA’s War on Prescrip-tion Painkillers” (Policy Analysis no. 545),what the DEA calls drug trafficking is oftenjust doctors prescribing necessary medicationsto patients with intractable pain. The govern-ment has used inflated statistics about the risksof narcotic painkillers to demonize pain med-ications and the doctors who prescribe them.The media have been complicit in propagat-ing frightening stories of addiction and deathwithout regard for the truth. Libby describeshow the DEA has doctors running scared,leaving tens of millions of Americans withoutrelief from their debilitating pain and wastinghundreds of millions of tax dollars to fight animaginary epidemic of painkiller abuse.

◆Reforming Tort ReformThe Class Action Fairness Act, which wasintended to reform large class action lawsuitsand protect the public from greedy trial lawyers,was signed into law this year. However, as Catosenior fellow Mark Moller argues in “Con-

DEA Treats Pain Doctors as Drug DealersThree new papers on Social Security reform

Cato Studies

Cato Policy Report is a bimonthly review published by the CatoInstitute and sent to all contributors. It is indexed in PAISBulletin. Single issues are $2.00 a copy. ISSN: 0743-605X.©2005 by the Cato Institute.•Correspondence should beaddressed to Cato Policy Report, 1000 Massachusetts Ave.,N.W., Washington, D.C. 20001. •WEBSITE: www.cato.org, call202-842-0200, or fax 202-842-3490.

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Patrick Basham

ty

As baby boomers retire and life expectancy con-tinues to rise, Social Security will be facedwith a $12.8 trillion shortfall, so maintainingthe current system willrequire higher taxes, ben-efit cuts, or both. Gokhalecontends that personalaccounts would ensurethat money is saved tomeet the needs of futureretirees. Short-term tran-sition costs to graduallyintroduce personalaccounts would be offset by investment of fundsin private markets, and personal accounts wouldbe better able to safeguard the resources thatwill finance future generations’ retirement. ■


also qualify as social insurance. The Cato SocialSecurity reform plan, for example, includes aminimum monthly benefit. And progressiveindexing of Social Security benefits would directa larger share of Social Security benefits to low-income workers, increasing the “insurance”aspect of the program. Yet liberals vehement-ly oppose those reforms, out of fear that theywould transform Social Security into an unpop-ular welfare program. But their fears are great-ly exaggerated, Wilkinson argues, and such adeceptive rationale for the program is incon-sistent with the fundamental liberal principle ofopen democratic deliberation. He urges liber-als to support personal accounts as a way ofenhancing the social safety net expanding eco-nomic opportunities for the poor.

◆Exploiting the Fear FactorMost Americans have come to accept intru-sions into their daily lives as a necessary cost offighting terrorism, but few have asked whetherthe sacrifices have made us safer. As Washing-ton Post columnist Melanie Scarborough explainsin “The Security Pretext: An Examination ofthe Growth of Federal Police Agencies” (CatoBriefing Paper no. 94), the need for rigorousdefense against terrorism is used to justify expand-ing federal powers and budgets. Measures pur-ported to protect the public—from restrictionson visitors to national parks, to abridgementsof the free speech rights of political protesters,to invasive searches by the new TransportationSafety Administration—are rarely scrutinizedto determine whether they meaningfully increasethe odds of stopping or capturing terrorists.Scarborough says that Americans must acceptthe reality that terrorism can never be fully pre-vented and that new restrictions on libertydesigned to protect national security must bescrutinized to determine whether their effec-tiveness outweighs their cost to liberty.

◆Underfunded MandateOpponents of Social Security reform have claimedthat allowing workers to open personal accountswould be too expensive because current pay-roll taxes are needed to fund benefits for cur-rent retirees. However, as Cato senior fellowJagadeesh Gokhale argues in “Social SecurityStatus Quo versus Reform: What’s the Trade-off?” (Social Security Choice Paper no. 35), anypotential costs of reform must be comparedwith the cost of maintaining the current system.

immigration so long as there is demand for laborin the United States and a steady supply of will-ing migrants. Massey argues for increasing thenumber of available work visas and finding waysfor the millions of otherwise law-abiding undoc-umented immigrants currently living here to legal-ize their status. A more nuanced, sensible immi-gration plan will help lower the costs of bordercontrol, boost both the U.S. and Mexican economies,and fortify the United States against real threatsto national security.

◆Taxing Away the Social Security Crisis?Two-thirds of American voters support the ideaof raising or eliminating the cap on income sub-ject to the 12.4 percent Social Security tax as away to solve the program’s financial woes. Butas Michael Tanner, director of the Cato Insti-tute Project on Social Security Choice, demon-strates in “Keep the Cap:Why a Tax Increase WillNot Save Social Security”(Cato Briefing Paper no.93), eliminating the capwould be the largest taxincrease in American his-tory and postpone SocialSecurity insolvency by onlyseven years. The 10-pointmarginal tax increase it would create could costthe United States nearly 1.1 million jobs overthe next 10 years. And because surplus SocialSecurity revenues are being spent on presentoperating expenses, not saved to pay future ben-efits, increasing current revenues creates futuredebt that will need to be funded with futuregeneral tax increases. Instead of that stopgapsolution, Tanner proposes that workers beallowed to invest 6.2 percent of their incomesin personal accounts, which would guaranteetheir benefit payments, allow workers tobuild inheritable wealth, and provide real sta-bility to a system that will otherwise soon facemammoth obligations it cannot afford to pay.

◆The Myth of Social InsuranceIn opposing personal accounts, liberals like tostress that Social Security is a “social insurance”program designed to protect people from themisfortunes of poverty in old age. But as Catopolicy analyst Will Wilkinson notes in “NobleLies, Liberal Purposes, and Personal RetirementAccounts” (Social Security Choice Paper no.34), by liberal standards, personal account plans

Jagadeesh Gokhale

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Mike Tanner

“To Be Governed...”

◆Big Brother is watching We should introduce “smart cards” to

serve as virtual medical coordinators. By usingthe cards, recipients could go to any doctor,get any lab test and fill any prescription—with the appropriate co-pays—and the trans-actions would be electronically recorded (andcould be monitored to identify patients whoare headed for trouble). . . .

We need to know more about these [high-cost] patients. Only recently have govern-ment agencies begun to assemble the moun-tains of data the government collects intopatient records. When my father visits aphysician, it is treated as a single, separatetransaction in the record. Any subsequenttests, treatments or visits are similarly report-ed, each with its separate record. Rarely hasanyone examined what he was being treat-ed for, what the results were of those treat-ments or the costs he incurred. And we knowlittle about treatments not covered byMedicare, such as pharmaceuticals. As wecollect data, we can begin to assess the stateof knowledge on treatment of multiple con-ditions to determine the best forms of treat-ment, including pharmaceuticals, and thebest settings for treatments.

—Dan Crippen in theWashington Post, May 1, 2005

An idea circulating in the U.S. Depart-ment of Education and on Capitol Hill saysthat . . . maybe the government should fol-low students’ progress through collegeby assigning them bar codes. . . .

As the government becomes an ever-bigger player in financing higher educa-tion, others see it as an idea whose time

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◆Sign up today for taxpayers’ money!Mark your calendar, call your parents

and do some homework for the fall signupof a new Medicare prescription drug pro-gram, President Bush said yesterday in thefirst of a series of events aimed at revvingup interest in the benefit that becomes effec-tive Jan. 1. . . .

The administration hopes that pub-licizing the drug coverage now will boostenrollment later.

“We’re on a massive education effortstarting today,” Bush said during a rally.

—Washington Post, June 17, 2005

◆We should try harderAs democracy takes root around the

world—often with America’s encour-agement—more women are joining thepolitical process. So it’s striking how lowtheir participation rates are here at home.When nations were ranked for women’sinvolvement in national legislatures andgovernments, the U.S. was 61st. Rwan-da was first.

—Parade, July 3, 2005

◆Is this a joke?[New York] Assemblyman Adriano

Espaillat . . . wants a minimum wage forcomics. The bill he introduced in the StateAssembly would raise the weekend rateto $120 and applies to “professional”comics.

Joel Barkin, a spokesman for Espail-lat, said that comics, like other workers,have felt the pinch from soaring real estateprices and stagnant wages.

—Washington Post, June 12, 2005

is coming. Without better informationon college students, “we’re going to throwgood money after bad,” warns Travis Reindl,director of policy analysis of the AmericanAssociation of State Colleges and Univer-sities, a trade group of 430 smaller publicschools.

The idea of tracking students first sur-faced last year as Congress began a regu-lar review of the Higher Education Actwhich, among other things, will provideabout $80 billion in grants and loans tocollege students this year. Lawmakers werefrustrated that they didn’t know such basicinformation as how many students grad-uate, how students receiving federal aidare faring or what they are studying.

—Wall Street Journal, April 27, 2005

Homeland Security Secretary MichaelChertoff this week floated an idea to starta nonprofit group that would collect infor-mation on private citizens, flag suspiciousactivity, and send names of suspicious peo-ple to his department.

The idea, which Chertoff tossed out atan April 27 meeting with security-industryofficials, is reminiscent of the Defense Depart-ment’s now-dead Total Information Aware-ness program that sought to sift thoughheaps of foreign intelligence informationto root out potential terrorist activity.

According to one techie who attendedthe April 27 meeting, Chertoff told thegroup, “Maybe we can create a nonprof-it and track people’s activities, and an algo-rithm could red-flag individuals. Then, thenonprofit could give us the names.”

—GovExec.com, April 29, 2005

Documents

Private Schools in the Poorest Countries - Cato Institute · 2016-10-20 · September/October 2005 Vol. XXVII No. 5 Private Schools in the Poorest Countries JAMES TOOLEY is director