The relative efficiency of public schools in developing countries

With the demand for schooling expected to increase and the tightening of fiscal constraints, changes will be necessary in order to meet ambitious educational targets. Instead of charging fees for public schools, a more cost-effective option is to rely on private schools to handle the growing demand for education. Private school students generally out perform public school students on standardized math and language tests. This finding takes into account that private school students usually come from slightly more advantaged backgrounds than their public school counterparts. In addition, school expenditure data show that unit costs for private schools are dramatically lower than those of public schools. The comparative advantage of private schools has important policy implications for public schools. Some efficiency gains can come from replicating the input mix of private schools. Also effective would be to mimic the organizational incentive structures of private schools.