_“It is argued that because of immense resource requirement, it is difficult for the government to achieve the objective of universalization of primary education. Accordingly, the opening of primary schools in the private sector is considered additionally to the effort of the government towards universalization. This is not a legitimate argument. The participation rates being already higher in urban settlements, it is in the rural areas that more schools are needed. The type of clientele going to these schools would any way participate in education. Thus, their role in universalization remains only marginal. Furthermore, because of the use of English as a medium of instruction, and high fee structure, these institutions are best suited to serve the requirement of elite population. Such a development is contradicted if effort is to be directed towards the development of an egalitarian society._ ”<sup>6</sup> A specific picture of the private sector is painted whereby (a) private schools charge high fees; (b) private schools locate typically in urban areas and (c) private schools cater to an “elite population”. Neither this debate nor this characterization is unique to Pakistan.<sup>7</sup> Using newly available data we present a starkly different picture of private schooling in Pakistan. There was a phenomenal rise in the share of the private sector in educational provision during the 1990s and an increasing segment of children enrolled in private schools are from _rural_ areas and from middle-class and poorer families. We submit that private schools are better able to adapt to local conditions and use local labor markets in a cost-effective manner, allowing the savings to be passed on to parents through very low fees. The median fee of a rural private school in Pakistan is less than a dime a day (Rs.6 per day, or Rs.120 per month). If replicable in other countries, the results suggest that separating the financing of education (the government) from the provision of education (through the private sector) will have large gains, without necessarily sacrificing equity.<sup>8</sup> Two considerations drive our focus on Pakistan. First, the extent of private schooling in Pakistan is striking. In 2000, 35 percent of children enrolled in school at the primary level were in private schools, and this number falls by a third for middle and high schools to 25 percent. Private schooling in Pakistan at the primary level is large, widespread and increasing over time. Second,

> 6See Ministry of Education (2006)

> 7 See The Bangladesh Observer (2004).

> 8 In the broader South-Asian context, Kingdon (1996 and 1998) first looked at private schools in the Indian context, where the private sector accounts for 15 percent of all enrollments; more recent contributions include Bajpai, Dholakia and Sachs (2005). The proliferation and nature of private schools in India appears to be similar to that in Pakistan. For in stance, Tooley (2001, pg.13) observes:

> “ _Any visitor to the ‘slums’ of any of the big cities in India will be struck by the sheer number of private schools—there seems to be one on almost every street corner or down every alleyway. Some of these confusingly follow what they see as an English tradition and call themselves public schools but they are wholly private in every way and are certainly not elite institutions_ .”

3