MARKET ORIENTED POLICIES FOR OUR EDUCATIONAL SECTOR: This is the first of a series of articles intended to motivate serious

discussion in the Dominican Republic about the need to transform our educational policy towards one that will stimulate competition, flexible curriculums, innovation and academic achievement by students through the performance of the entire academic body. It is an undeniable secret that in our country the Public Educational Sector is in shambles. The statistics are staggering. To mention just a few in order to illustrate this fact: 80% of those enrolled in first grade will not make it through 8th grade, Pre-school coverage is insignificant, High School graduates do not meet even the most basic math and grammar requirements. These poor levels of performance have the subsequent problem that they pull all Private Endeavors down, so that Private Schools have no immediate basis for strong competition. We need to move towards a system that will increase: coverage, labor flexibility, entry of new professionals into the teaching and school management positions and above all that will decentralize the system so as to better serve the innate cognitive requirements of small and large social conclaves. There are two basic mechanisms which can be utilized in order to achieve such objectives, and both assume the undeniable fact that market oriented institutions are more productive and conducive to progress than publicly run entities. These are the Voucher and the Charter Schools Mechanisms. These two systems are not mutually exclusive of one another but we will treat them separately for the time being. In this article we will concentrate mainly on the first and will leave the latter for a follow up presentation. The Voucher Mechanism to the allocation of students within a Publicly Run school system was first suggested by Milton Friedman 1 and consists in the States (in our case the Educational Ministry, Secretara de Estado de Eduacin), providing a redeemable IOU directly to the family and letting them decide to which school to take their child. In Friedmans words, The most feasible way to bring about such a transfer from government to private enterprise is to enact in each state a voucher system that enables parents to choose freely the schools their children attend. The voucher must be universal, available to all parents, and large enough to cover the costs of a high-quality education. No conditions should be attached to vouchers that interfere with the freedom of private enterprises to experiment, to explore, and to innovate. Most authors including Friedman acknowledge that the Vouchers will not solve by itself the problems but its an ideal mechanism to promote private ingenuity and achievement within the Public School System. As we speak the Dominican Government although it is is spending the second to lowest ratio in the American Continent on Public Education, around RD$460.00 a month per student (which is equivalent to 2.3% of our Current GDP) at the same time more than 80% (more than 16% of all students between PreSchool and High School levels) of all privately run schools charge less than RD$500.00. This reflects two immediate problems, the low level of public investment is providing no
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Public Schools Make them Private. Friedman, Milton. Cato Institute Briefing Paper No. 23, June 1995

stimulus for private competition, this in turn creates an investment trap that does not allow consolidation within the sector and keeps small inefficient private schools operating since there are no true incentives to improve, hence invest, in the quality of the service provided. The second thing it reveals is that in the Dominican Republic due to the lack of an acceptable Public School system low income families send their children to comparable Private Schools in order to guarantee a minimum of instruction. There are multiple forms in which a Voucher System can be applied, and the literature in it is each day more extensive. Authors such as Thomas J. Nechyba have demonstrated that a Targeted Private School Voucher System also improves the quality of instruction and improves on Income Distribution issues within the population.2 So that even if these Vouchers where targeted for use within the Private School System they would greatly improve the conditions of the Private Schools and the quality of the instruction they currently offer. Now an immediate question comes to mind and its: If the Voucher System has so many immediate and long term advantages why have Developed Market Oriented Nations like the US adopted this system and a broader basis. The answer is that although many attempts have been made with minor exceptions (such as the case of Green Bay, Wisconsin), no one has succeeded in getting a voucher system adopted, thanks primarily to the political power of the school establishment, more recently reinforced by the National Education Association and the American Federation of Teachers, together the strongest political lobbying body in the United States. In our country projects such as this one will surely confront severe opposition by the Teachers Union (ADP) and by many political sectors within the SEE. This is why our suggestion is that this program be started with a few specific school Districts and under direct supervision from a multilateral organism in order to control outside damaging pressures. For this the SEE could take advantage of The National Census, which is currently being organized in order to use this information to transform the Educational Sector, decentralizing the educational operation and giving cities and provinces the opportunity to manage their own educational horizon. As families are provided with the option to decide which school provides the better service, intelligent choices will be made and the general public will be more informed and willing to participate in the transformation of the Educational Sector. to be continued..

Thomas J. Nechyba, A Model of Multiple Districts and Private Schools: The Role of Mobility, Targeting, and Private School Vouchers. NBER Working Paper 7239, Issued in July 1999.
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