Tahir Andrabi

A dime a day : the possibilities and limits of private schooling in Pakistan

This paper looks at the private schooling sector in Pakistan, a country that is seriously behind schedule in achieving the Millennium Development Goals. Using new data, the authors document the phenomenal rise of the private sector in Pakistan and show that an increasing segment of children enrolled in private schools are from rural areas and from middle-class and poorer families. The key element in their rise is their low fees-the average fee of a rural private school in Pakistan is less than a dime a day (Rs.6). They hire predominantly local, female, and moderately educated teachers who have limited alternative opportunities outside the village. Hiring these teachers at low cost allows the savings to be passed on to parents through low fees. This mechanism-the need to hire teachers with a certain demographic profile so that salary costs are minimized-defines the possibility of private schools: where they arise, fees are low. It also defines their limits. Private schools are horizontally constrained in that they arise in villages where there is a pool of secondary educated women. They are also vertically constrained in that they are unlikely to cater to the secondary levels in rural areas, at least until there is an increase in the supply of potential teachers with the required skills and educational levels.

Report Cards: The Impact of Providing School and Child Test Scores on Educational Markets

This paper studies study the impact of providing school and child test scores on subsequent test scores, prices, and enrollment in markets with multiple public and private providers. A randomly selected half of the sample villages (markets) received report cards. This increased test scores by 0.11 standard deviations, decreased private school fees by 17 percent, and increased primary enrollment by 4.5 percent. Heterogeneity in the treatment impact by initial school quality is consistent with canonical models of asymmetric information. Information provision facilitates better comparisons across providers, improves market efficiency and raises child welfare through higher test scores, higher enrollment, and lower fees.

What Did You Do All Day? Maternal Education and Child Outcomes

Does maternal education have an impact on children’s educational outcomes even at the very low levels found in many developing countries? We use instrumental variables analysis to address this issue in Pakistan. We find that children of mothers with some education spend 72 more minutes per day on educational activities at home. Mothers with some education also spend more time helping their children with school work. In the subset that have test scores available, children whose mothers have some education have higher scores by 0.23–0.35 standard deviations. We do not find support for channels through which education affects bargaining power within the household.

In aid we trust : hearts and minds and the Pakistan earthquake of 2005

In 2005 an earthquake in northern Pakistan led to a significant inflow of international relief groups. Four years later, trust in Europeans and Americans was markedly higher among those exposed to the earthquake and the relief that followed. These differences reflect the greater provision of foreign aid and foreigner presence in affected villages rather than preexisting population differences or a general impact of disasters on trust. We thus demonstrate large-scale, durable attitudinal change in a representative Muslim population. Trust in Westerners among Muslims is malleable and not a deeply rooted function of preferences or global (as opposed to local) policy and actions.

Railways and Price Convergence in British India

The period 1861 to 1920 witnessed sharp price convergence in British Indian grain markets. Previous research attributed this to the construction of railways. But tests examining price differences between districts provide surprisingly weak support for that hypothesis. Railways mattered, but seem capable of explaining only about 20% of the decline in price dispersion. One explanation may be that India was a partially integrated economy at the time of railroad expansion. Lines connecting districts on pre-existing trade routes had very small price effects. There is also some evidence of a “border effect” on lines between British India and princely states.

Seigniorage, Taxation, and Weak Government

We examined a setting where decision making about financing a given amount of government spending is decentralized. Seigniorage is the residual tax that passively adjusts to meet the budget constraint. We place this budget making process in a repeated game setting and characterize the cooperative tax-seigniorage function. Three main results are (1) Seignioiage and transitory changes in output are positively correlated. This result holds after controlling for changes in government spending. (2) A positive (negative) covariation between current period government spending and transitory output strengthens (weakens) the positive relationship between seigniorage and transitory output. (3) Seigniorage is negatively correlated with trend output growth. Time series empirical tests using annual data for 20 OECD countries support the first two results. A test using cross-section data on 75 countries confirms the third hypothesis. Copyright 1997 by Ohio State University Press.

Bank Regulation and Debt Overhang

The paper explains why banking regulations are crucial to the unfolding of the current international debt crisis. The interplay of deposit insurance and capital adequacy requirements may create strong disincentives against offering relief to debtor countries with solvency problems, in spite of the fact that granting relief would improve the worth of the claims held by creditor banks. Furthermore, it is shown that the negotiating stance of individual banks is not related to their exposure to troubled loans in any simple way. Whether highly exposed banks are tougher than those with limited exposure is also generally dependent on the features of the regulatory environment. Copyright 1994 by Ohio State University Press.

Upping the ante: the equilibrium effects of unconditional grants to private schools

This paper tests for financial constraints as a market failure in education in a low-income country. In an experimental setup, unconditional cash grants are allocated to one private school or all private schools in a village. Enrollment increases in both treatments, accompanied by infrastructure investments. However, test scores and fees only increase in the setting of all private schools along with higher teacher wages. This differential impact follows from a canonical oligopoly model with capacity constraints and endogenous quality: greater financial saturation crowds-in quality investments. The findings of higher social surplus in the setting of all private schools, but greater private returns in the setting of one private school underscore the importance of leveraging market structure in designing educational subsidies.

Delivering education: a pragmatic framework for improving education in low-income countries

Even as primary-school enrollments have increased in most low-income countries, levels of learning remain low and highly unequal. Responding to greater parental demand for quality, low-cost private schools have emerged as one of the fastest growing schooling options, challenging the monopoly of state-provided education and broadening the set of educational providers. Historically, the rise of private schooling is always deeply intertwined with debates around who chooses what schooling is about and who represents the interests of children. This time is no different. But rather than first resolve the question of how child welfare is to be adjudicated, this paper argues instead for a `pragmatic framework’. In this pragmatic framework, policy takes into account the full schooling environment—which includes public, private and other types of providers—and is actively concerned with first alleviating constraints that prohibit parents and schools from fulfilling their own stated objectives. Using policy actionable experiments as examples, this paper shows that the pragmatic approach can lead to better schooling for children. Alleviating constraints by providing better information, better access to finance or greater access to skilled teachers brings more children into school and increases test-scores in language and mathematics. These areas of improvement are very similar to those where there is already a broad societal consensus that improvement is required.