_Policy, Planning, and Research Working Paper Series_ 21 A key consideration in the policy debate on the appropriate role of private schools in predominantlypublic school systemsis cost effectiveness. The questions are: Do private school students learn more than their public school counterparts? Andisit more or less expensive to educate students in private schools?

Once a government engages in such an experiment, it is led to repeat it periodically to survive. The countries that entered this path are likely to remain for a long time under a controlled economy, sacrificing their growth potential on behalf of some stability in income distribution and less explosive inflation.

Eventually this 'muddling through" policy may break down, precipitating hyperinflation and consequent structural changes -but this does not seem tobe an imminent or even a necessary outcome.

Eventually this 'muddling through" Past studies in the Philippines and policy may break down, precipitating elsewhere have claimed that the educahyperinflation and consequent structural tional achievement of students in the changes -but this does not seem tobe an private schools is higher than that of imminent or even a necessary outcome. students in public schools. These studies A basic flaw of the 'heterodox" stabiprovide, however, only weak evidence lization programs was to assume that regarding the relative cost effectiveness stabilizing the price level (through a of public and private schools. A fundageneral freeze) was a precondition for mental weakness is the potentially serifiscal equilibrium and eventual fiscal ous problem of selectivity due to unobserreform - instead of the reverse. The fisved differences between the student cal austerity promised after stabilization population of each type of school. Most of - was never accomplished blocked by the studies do not compare costs in the bureaucrats and special interest groups two types of institutions. interested in maintaining the status quo. Taking selectivity into account, the The challenge in these countries is to paper finds that controlling for the effects devise economic programs that could of students' socioeconomic background, make long-term stabilization programs individual motivation, and innate ability, viable and politically acceptable. the private schools show a significant Taking selectivity into account, the paper finds that controlling for the effects of students' socioeconomic background, individual motivation, and innate ability, the private schools show a significant edge over public schools in both English and Pilipino (about 15 percent of the sample mean achievement scores). Public schools, on the other hand, had a slight (roughly 4 percent) advantage in mathematics.

In this sense, stabilization is less a technical economic problem than an intertemporal political problem of how to compensate the losers, on the one hand, and on the other hand to convince the majority that the trade-offbetween sacrificed current consumption and increased future consumption is worthwhile. The precarious political systems in these countries have been unable to deal with conflicts and support consistent longterm policies.

A comparison of cost per student reveals a substantial advantage for private schools: public schools in the Philippines spend on average roughly twice as much as private schools. These findings strongly suggest that private schools are an efficient purveyor of secondary education in the Philippines, a conclusion that shouldbe takenintoaccountintheformulation of policy measures that could threaten the existence of such schools.

This is a background paper for the 1988 World Development Report. Please contact Lupita Mattheisen, room S13067, extension 33757 (36 pages with charts and tables).

This paper is a product of the Education and Employment Division, Population and Human Resources Department. Please contact Teresa Hawkins, room S6224, extension 33678.

## 51 - 60 Assigned to the background papers of the 1988 World Development Report.

# 61. Student Performance and Schools Costs in the Philippines' High Schools

## 62. Universities In Arab Countries

## George I. Za-rour

Emmanuel Jimenez, Vicente Paqueo, and Ma. Lourdes de Vera _The quality of higher education in the Arab world has suffered because of the rapid growth of university systems. Despite popular demand, several Arab governments are questioning the wisdom of continuing to expand these systems._ _Private schools in the Philippines are substantially more effective than their public counterparts in teaching language skills, and much less costly per pupil than public schools._ Half the Arab universities in existence today were established after 1970. Enrollment has increased even faster - leading to overcrowding, unqualified faculty, and insufficient equipment and facilities.

Several Arab nations have already moved to control (in some cases, to reduce) enrollment. They have done this partly because of the fall in oil revenues and partly in recognition of the problems related to the rapid growth of the university systems.

Open admissions policies in some systemshave ledtohigh failure and dropout rates, as well as to the shunting of many students by default into 'schools of last resort:" the arts, social sciences, and law.

As student enrollment expanded rapidly, the quality of education suffered and many universities became less attractive to highly trained faculty. This pattern has contributed to national and regional brain drain.

Overcrowding has also led to a greater reliance on lecturing as a means of instruction, a method not particularly conducivetothedevelopmentofcriticalor incisive thinking. Faculty accessibility and strong faculty support for student development seem to be the exception rather than the rule atmanyArab universities.

Instruction in French or English, sometimes necessary because of a shortage of Arabic-speaking faculty and a lack of appropriate Arabic texts, hurts students not proficient in those languages.

The cost of underwriting university education at a time of slow economic expansion raises the issue of whether it is better to have unemployed high school graduates or unemployed university graduates.

This paperis a product of the Education and Employment Division, Population and Human Resources Department. Please contact Cynthia Chzistobal, room S6-035, extension 33640.

## 63. Does Japan Import Less Than It Should?

## Kenji Takeuchi

_Conflicting studies on Japan's imports of manufactures leave open the question of whether the country's import volume is lower than normal._