A Comparative Analysis of Educational Privatization and School Choice on Testing and Access in the United States and Pakistan

A Comparative Analysis of Educational Privatization and School Choice on Testing and Access in the United States and Pakistan

Wajeeha Hazoor

Florida State University

DOI: https://dx.doi.org/10.47772/IJRISS.2025.905000370

Received: 14 May 2025; Accepted: 17 May 2025; Published: 17 June 2025

BACKGROUND

Privatization in education is a global phenomenon that is rooted in the New Public Management (NPM) reforms of the 1970s (Koinzer, Nikolai & Waldow, 2017). NPM relies on the principle-agent dynamic which pertains to the inherent mismatch between the objectives of the principal and agent and puts results and efficiencies at the center of programming rather than issues of equity or fairness (Greuning, 2001).

The impact of the most recent wave of globalization (starting in the 1990s) under which the aforementioned reforms took place in the educational sector globally is complex, due to the various drivers, processes and entities involved (Yergin & Stanislaw, 2002; Verger, Novelli, & Altinyelken, 2012). In general, neoliberalism, which is an underlying feature of this wave of globalization has led to the spread of educational privatization in both “developed” and “developing” countries (Yergin & Stanislaw, 2002; Coleman & Jones, 2004). In this context, in the United States (U.S.) for example, we may find the introduction of charter schools in the early 1990s.  In Pakistan, we find a reduction in national educational expenditures, resulting in higher opportunity costs for schooling, the crowding out the state, and expansion in the private school sector coinciding with this time period (See Stromquist & Monkman, 2014; Robertson & Verger 2012).

The provision of education as a basic human right is enshrined in the Universal Declaration of Human Rights and accompanying United Nations instruments to which both “developed” and “developing” countries  around the world, including the U.S. and Pakistan, are signatories (See King, 2007; Jansen, 2005). These instruments, signed in the aftermath of World War II,  recognize education as a public good.  Yet, for-profit educational initiatives have mushroomed in both “developed” and “developing” countries in recent decades, which may be perceived as as an effort to move education away from the realm of a public good. Some examples to this end include public private partnerships in education, Low-Fee Private Schools (LFPS), Education Management Organizations (EMOs) and educational impact bonds such as the Educate Girls Development Impact Bonds, amongst various other manifestations. This is in spite of critiques that the private sector is not a reliable provider of public goods due to inherent profit-making motive which leads to a myriad of issues such as moral hazard, for example, which arises due to a focus on the delivery of services with the intent of efficiency and profit-making at the expense of equity. More specifically, profit-making in education stands at odds with the delivery of a basic human right (Aubry, Koning & Adamson, 2021).

The Abidjan Principles that were adopted in 2018 by educational experts in the presence of a United Nations and eminent Civil Society Organizational (CSO) representatives, reiterate the importance of state oversight over educational delivery, calling for a “regulation” of the private sector, in a pushback to the unbridled liberalization in the educational sector over the past three decades (Aubry, Koning & Adamson, 2021). Much attention here has been directed towards “altruistic” privatization efforts such as LFPS that claim to counter the equity argument against privatization, yet have been found to put education out of the reach of the poorest as conceded by even by vehement proponents of LFPS (See Tooley & Longfield, 2015). These principles have informed a “push” against privatization at the level of the state, multilateral and bilateral agencies; it is important to highlight that this “push”, does not seek to eliminate the private provision of education. Instead, it calls for regulation to prevent the ill-effects of privatization efforts that have been documented in recent decades vis a vis empirical research and evaluations led by academics, multilateral agencies and bilateral organizations as well as CSOs (Aubry, Koning & Adamson, 2021).

In this context, I seek to analyze empirical evidence on school choice that has led to the emergence of various privatization modalities in the U.S. and Pakistan to contribute to the debate on privatization in education. I examine to what extent school choice affects quality and access to education in the U.S. and Pakistan through an analysis of relevant literature relying on quantitative and mixed-methods approaches in the field of economics of education.

CASE SELECTION AND METHODOLOGY

Two cases are analyzed in this study. The U.S. and Pakistan. The case selection methodology is extreme in that the U.S. lies on one end of socioeconomic development continuum, and is home to pioneering approaches in privatization in education, with the concept of school choice being forwarded by Milton Friedman as a solution to issues in public educational delivery in the 1955. The Anglo model has formed the basis of school choice programs globally, including Pakistan. Pakistan lays on the other end of the socioeconomic development continuum, with a rather recent integration (in 2006) of Anglo-school choice modalities in its educational system vis-à-vis the Punjab Education Foundation (PEF). The PEF, a PPP, is credited with introducing school choice programs through its New Schools Programs (NSP), Education Voucher Scheme (EVS) and Foundation Assisted Schools (FAS) across Pakistan with the assistance of US origin financial and technical assistance (Ansari, 2012). The Pakistani EVS program is hailed as the largest voucher scheme in the world–making the country an atypical case in South Asia.

Furthermore, whereas the U.S. has physical educational infrastructure across its territory at all levels of education, Pakistan suffers from a lack of sufficient educational infrastructure even at the primary school level for girls, and at the secondary and post-secondary level for both boys and girls.  Another important criterion on which the two countries lay on extreme ends of the continuum is that of gender parity in education–Pakistan is yet to meet universal standards on girls’ access to education whereas the U.S. does not suffer from issues of gender parity in education; rather a segment of school choice literature reveals girls outperforming boys in state tests (See Figlio & Karbownik, 2016).

On another note, there are certain similarities that facilitate a sound comparative framework. Educational administration is decentralized in the U.S. and Pakistan and both countries are democratic in nature–Pakistan since 2008. Furthermore, in the context of promoting geopolitical stabilization under the War on Terror, Pakistan has been the recipient of large amounts of bilateral aid from the U.S. in the past, a significant amount of which was directed towards the educational sector between 2001 and 2019. This educational support is considered high impact investments that assisted in curtailing extremist ideologies in Pakistan.

To conduct this inquiry I conduct a review of academic literature in the economics of education focusing on access, or more specifically, in the American context, school proximity and its effects on enrollment and testing.  Charter schools that are a modality of school choice are also briefly reviewed to this end.  For the Pakistani context, effects of school choice on enrolment and testing are studied. I concede that assessing the quality of education through testing is a reductionist interpretation of quality. Yet, much of the school choice literature in the discipline of economics of education is focused on this parameter. Qualitative studies employing ethnographic approaches to study quality of education holistically are excluded from this study, but will be analyzed in future research.

It is important to highlight here that unlike in Pakistan, school choice seems to be a politicized issue in the U.S. Pro-school choice literature issued by think tanks such as Cato Institute engage in fantastic thought experiments to deem public education harmful, attributing (through the application of quantitative research approaches), criminal behavior by juveniles to their enrollment in the public school system (See Santoro, 2018). Such pieces are rooted in attempts to debunk the categorization of education as a public good on the grounds of non-excludability and non-rivalry. Due to partisanship, such pieces are excluded from the analysis herein, and I retain a focus on academic literature. More specifically, I include pieces that could be found through academic databases. Google scholar complemented by Gottesman Libraries search engine (housed at Teachers College, Columbia University) was utilized to conduct 20 keyword searches. Abstracts of over 200 articles were reviewed and approximately two dozen were found to be relevant to this study and analyzed in further detail. Where publications were found to have had a think tank or foundation funding the research, it was thoroughly vetted prior for impartiality in any underlying assumptions prior to inclusion in the study.

THEORETICAL BACKGROUND

The concept and application of school choice which has driven the manifestation of privatization in education globally is based on Friedman’s (1955) seminal piece The Role of Government in Education that was written in the context of a failing American public school system and segregation in the mid-1900s. In it, Friedman (1955) calls for a voucher program, which provides parents the liberty to apply state funding to public or private schools of interest, to resolve the quality issues afflicting the public educational system. In other words, the introduction of the dynamics of school choice in the educational sector.  Through this, free market dynamics, and resultantly, competition, would be introduced into the educational system, resolving the issue of access and quality of education versus segregation at the time (Friedman, 1955).[1]

Along with Friedman’s (1955) conceptualization of school choice, it is further pertinent to add a framing for school choice modalities that are best encapsulated in the notion of exit, voice and loyalty (Hirschmann, 1970). Coined by A.O. Hirschmann, the former refers to the ability of families to leave certain schools if the quality does not meet their expectations thereby putting schools under pressure of improving quality (Hirschmann, 1970). Voice pertains to lobbying for improvement of learning conditions without the practice of exit, and loyalty refers to the concept of families choosing to remain in certain schools, despite what may be at times poor teaching and learning conditions and outcomes (Hirschmann, 1970). I apply to Hisrchmann’s notions to the following analysis.

FINDINGS

Testing

U.S.

For the U.S., much of the school choice literature is concerned with estimating the effects of voucher programs on learning outcomes as revealed by test scores. Using a means tested voucher program in Florida, Figlio & Hart (2014) find evidence of the John Henry and Hawthorne effects[2] in test results at public schools in the form of improved results. They compare how public schools fare in the context of the introduction of private schools in the same vicinity, with the simultaneous provision of school incentives to enhance performance (Figlio & Hart, 2014). The isolation of the outcome variables from other explanatory influences such as student body composition or increased levels of resources in public schools ensured the robustness of results (Figlio & Hart, 2014).

 On the other hand, a series of studies on the effects of voucher programs reveal negative learning outcomes in the U.S. Waddington and Berends (2018) find that the Indiana Choice Scholarship Program led to a decline of 0.15 standard deviations on average in mathematics for students who practiced exit and entered private schools as opposed to students who had also been matched to private schools but practiced loyalty and stayed in the public-school system (See Hirschmann, 1970).

Similarly to Waddington and Berends (2018), Mills and Wolf (2019) conduct a Randomized Controlled Trial(RCT) involving 1,206 students to study the Louisiana Scholarship Program between 2012-13 and 2016-17 to find that school vouchers for the poorest attending private schools led to the lowering of student outcomes over the first year, again, with a pronounced effect in mathematics as measured in state assessments in grades three to eight. They find the effect weakening in the second year and in the following year, they believe impacts may be null or slightly positive, but findings are not conclusive and results are statistically insignificant (Mills & Wolf, 2019). This adds to additional literature from the Lousiana Scholarship program by Abdulkadiroglu, Pathak & Walters (2018) that reported statistically significant negative effects of vouchers on test scores in math, reading, science and social studies. They attribute this to imperfect information that parents may have regarding the quality of schools and the inclusion of low quality (private) schools in the program.

Figlio and Karbownik (2016) similarly conduct an evaluation in Ohio, to find that relatively well-off families and students who do well in public schools take part in the program due to the way it is designed (admission must precede voucher receipt). They claim that math and reading scores   (as measured through student standardized test scores in state assessments) suffer for students who exit high performing public schools under the EdChoice Scholarship Program compared to students who were eligible but stayed in the higher performing public schools (Figlio & Karbownik, 2016). This gap is found to decline over a five year period.

With regards to charter schools, there is a focus in the literature in economics of education on comparison of learning outcomes compared to public schools. While empirical evidence indicates that overall, charter school performance does not vary significantly from public schools, there is evidence that student performance effects are heterogeneous (Cohodes & Parham, 2021).

 Cohodes and Parham (2021) review evidence across the U.S. over a thirty year period (1991-2021) to find that even if learning gains are not significantly different from public schools, charter schools do record larger gains for the poorest and minority students (Cohodes & Parham, 2021). However, in cases where student learning outcomes are measured through test scores and are comparatively better, it is found that charter schools in cities, such as Boston, focus more on preparing students for particular tests compared to public schools, and this comes at the cost of the quality of learning that could occur were the focus not performative (Cohodes, 2016).

Pakistan

In Pakistan Barrera-Osorio, Blakeslee, Hoover, Linden, Raju & Ryan (2017) conduct an RCT in 199 villages (38 control villages and 82 with subsidy for tuition and 79 with gender based subsidy[3]) over eighteen months to find that the provision of a subsidy in the province of Sindh in Pakistan, that eliminated tuition costs for families by depositing fees directly to private schools, lead to test scores improving by a total of 0.63 standard deviations with no gender gaps reported in results. A comparison to public schools and private schools not covered by the program revealed that treatment recipients achieved 0.16 standard deviations higher in test scores in mathematics and language (Urdu and Sindhi) (Barrera-Osorio et al, 2017). They also find that there was no exit from public schools.  The improvement was equivalent to two standard deviations for students incentivized to enrol in school through the subsidy. However, the authors noted that the private schools had a better overall quality of education and resources compared to public schools in the vicinity  (Barrera-Osorio et al, 2017).  This is because part of the subsidy receipt from the SEF entailed teacher training and the provision of teaching and learning materials to the newly established schools (Barrera-Osorio et al, 2017).

With regards to testing, Andrabi, Bau, Das and Khwaja (2020) too present causal evidence from 112 schools in three districts in Punjab.[4] They utilize data collected from schools, students and households between 2003-2007 to demonstrate that private education leads to test scores’ improvement in English, Urdu and Mathematics (Andrabi et al, 2020). It is found that each year spent at private schools increases test scores by 0.1 to 0.2 standard deviations. In comparison to public schools, private school students score 0.45 standard deviations higher in maths, 0.55 standard deviations higher in Urdu and 0.78 standard deviations higher in English (Andrabi et al 2020).

 Furthermore, assigning all public school students to the worst private schools leads to a gain of 0.07 standard deviations in mean test scores whereas the assignment of all public school students to the best private schools in the village leads to an increase in mean test scores to 0.23 standard deviations (Andrabi et al, 2020). Yet, this study does not control for background variables in that students in the sample generally arose from wealthier and more educated backgrounds than students in a typical Pakistan village – this was due to the selection of sites based on pre-existing private schools which are generally established in relatively wealthier rural regions (Andrabi et al, 2020)

In another study relying on the same dataset but focusing on only the first two rounds of data collection, Andrabi, Das and Khwaja (2015) report that the provision of information to families vis a vis report cards, leads to an improvement of 0.31 standard deviations in test scores amongst private schools that had low scores at baseline. Private schools that were performing well at baseline did not record any increase in scores. In both types of public schools (those  that were performing poorly and very well at baseline), there was no statistically significant difference in test results due to the provision of information but there was a 0.097 standard deviation increase overall in both types of schools (Andrabi et al, 2015). Overall, report card provisions led to an increase of 0.11 standard deviation test increase in treatment villages. This study indicated that private schools in general offer differentiated services (Andrabi et al, 2015)

Similarly, various evaluations of the PEF reveal outcomes of voucher programs on testing. Utilizing descriptive statistics, Ansari (2012) cautions that there is not much improved performance of voucher recipients when compared to non-voucher supported students in Maths, English, Science and Urdu on a test administered by the PEF in supported schools. Yet, the students receiving the vouchers come from impoverished backgrounds and are placed in classrooms with peers who are able to afford studying in private schools.  Thus, the vouchers are deemed successful in helping them “catch up” with peers from better socioeconomic backgrounds (Ansari, 2012).

Arshad and Qamar (2018) in a descriptive analysis amongst PEF assisted schools discover that while schools do record improved test scores, however, effects of test scores are heterogeneous in that there are wide gaps in results between districts. For example, while the district of Sahiwal recorded a mean test score of 289.94, Okara recorded a test score rating of 322.97 (Arshad & Qamar, 2018).  Overall, the authors analysing PEF schools provide empirical evidence on improved test results despite variation in results between districts (Ansari, 2012; Qamar & Arshad, 2018).

The analysis in this section reveals that in Pakistan overall, some positive increases in test results are found but closer inspection reveals that effects are heterogeneous. This is arguably in line with literature in the U.S. where with some exceptions, declines in testing are recorded under school choice programs. Alternatively, even in cases where private school test scores rise, marginalized students seem to suffer from poorer test scores in certain instances, but may achieve higher scores in the case of charter schools. Yet, the Hawthorne and John Henry effects reported by Figlio and Hart (2014) are not revealed in Pakistan for public schools. This may be explained by supply side constraints as well as the fact that in certain regions, private schools are the only form of education available due to which the scope for market dynamics to function is limited (Koinzer, Nikolai & Waldow, 2017).

School Access

U.S.

In terms of access, in the U.S., Bergman, Chetty, Deluca, Hendren, Katz and Palmer (2020) conduct an experiment involving 118 impoverished families (treatment group) in Seattle and King County to find that if treatment groups where families are residing in low-income neighborhoods are provided sufficient incentives (in the form of short-term housing vouchers)  they choose to move to high upward mobility neighbourhoods, with better quality schools. An implication of this study is that poor families do not necessarily reside in low income neighbourhoods voluntarily and provision of additional programming components such as transportation stipends, may improve the practice of school choice (Bergman et al, 2020).[5]

Agarwal and Somaini (2020), apply a revealed preference approach to utilize explicit preferences stated by students or parents to “find fair and efficient assignments” (p. 472) in schools. The authors find that examining the demand for schools is a complicated task as there is an interplay of numerous factors that leads to demand creation and supply-side responses (Agarwal & Somaini, 2020). Even where students have full information related to schools, they are often not able to attend their top school of interest because of capacity constraints on the side of schools, rather than demand (Agarwal & Somaini, 2020). The authors further corroborate that proximity to schools is associated with practice of choice (Agarwal & Somaini, 2020).

Here, we may also consider Altonji and Mansfield (2014) who rely on data from longitudinal surveys on education from 1972, 1988, 2002  and administrative data collected by the state of North Carolina to find through the application of standard choice models controlling for socioeconomic characteristics, the likelihood of students (on average) graduating from school increases by 0.04 percentage points if the school (and by extension, the neighborhood) is in the ninetieth instead of the tenth quantile.

Pakistan

In Pakistan, various evaluations of the PEF reveal strong outcomes of school choice programs on enrolment – this is the case in FAS as well as the EVS. Barrera-Osorio and Raju (2015) utilized regression discontinuity in an RCT conducted over a seventh month period on the FAS[6] to find that the program led to an expansion (increased access) of the student body by 59 percentage points.

Similarly, Arshad and Qamar (2018) in a descriptive analysis of the PEF assisted schools in the district of Sahiwal find that the schools record a rise in enrolment 12% to 23% each year. Barrera-Osorio et al (2017) find that the provision of a subsidy in the province of Sindh in Pakistan through the Sindh Education Foundation led to enrolment rates increasing by 30 percent with no gender gaps noted.

Carneiro, Das & Reis (2016) conduct a structural study estimating a demand model for varying products in over 100 educational markets in the rural regions of Pakistan with what they note are significant opportunities to practice choice amongst both private and public school attendees. It is noted that families were willing to pay between 75% and 115% of private school fees for every 500 meter decline in school distance (Carneiro, Das & Reis, 2016). Furthermore, through their analysis, they determine low levels of price elasticities for both girls and boys, but lower elasticities for girls at -.5 compared to boys with -.2 (Carneiro, Das & Reis, 2016). They find that subsidies eliminating school fees have a greater effect on increasing enrolment for girls compared to boys at 7.2 and 4.2 percentage points respectively (Carneiro, Das & Reis, 2016). A key finding here is that school fees are not a deterrent to enrolment in private schooling (Carneiro, Das & Reis, 2016).

Findings from Pakistan are in line Altonji and Mansfield (2014), Agarwal and Somaini (2020) who find that proximity to schools affects the practice of choice, with the former citing evidence on improved educational outcomes in terms of school completion, based on school location and quality. Carneiro, Das & Reis (2016), in finding families even willing to pay more for a reduction in distance to schools are aligned with Bergman et al (2020) who find that if poor families are provided sufficient financial assistance, they are willing to move to from low income neighborhoods to high mobility neighborhoods where higher quality schools maybe available. Overall, in Pakistan, the practice of exit is precluded if no competition is present in a given location, and the literature reviewed for the U.S. does not approach this subject from a gender perspective.

CONCLUSION

Table 1: Summary of findings

In terms of quality in Pakistan overall, we may conclude that positive increases in test results are found through the introduction of school choice and transfer to private schools, as opposed to the predominant literature in the U.S., where with some exceptions, declines in student test results at private institutions or similar results are recorded under school choice programs. The findings are however aligned in both regions in terms of revealing heterogeneity in learning outcomes based on baseline characteristics of student populations, in that in certain instances, even in the context of the rise of overall test results, poor students do not experience improved grades, whereas in other cases, while there might not be a significant rise in school test results, effects are most positively pronounced for marginalized students (See Ansari, 2012; Figlio & Hart, 2014; Arshad & Qamar, 2018; Cohodes and Parham, 2021). Findings therefore remain ambiguous and the temporal length of the analysis seems to have some effect on the type of results found.

In terms of school access in both the U.S. and Pakistan it is found that proximity to schools affects the practice of choice and families are willing to move and/or transfer to what they perceive to be, in both countries, better quality private schools, if provided the opportunity. Families in Pakistan are willing to pay more for a reduction in distance to schools whereas poor families are willing to move to from low income neighborhoods to high mobility neighborhoods in the U.S. if provided sufficient financial assistance in the form of housing vouchers (Carneiro, et al, 2016; Bergman et al, 2020).

In short, whereas school choice may increase access to private schools for impoverished populations, financial assistance maybe required in the U.S. to move to higher mobility neighborhoods and in Pakistan transportation stipends or construction of private schools in the vicinity of marginalized students maybe necessary. This is because moving may not be an option in rural or tribal communities, yet neighborhoods have an important effect on student attainment. The effect of choice on the quality of education, as measured by test results, is ambiguous in both the U.S. and Pakistan. This draws into question the trend towards the expansion of private educational solutions globally, if issues in the public schooling system are recreated in the private schooling system despite the provision of vouchers and subsidies that may eliminate tuition fees for families.

The findings of this study further hold implications for equity in educational privatization initiatives, which is a key point in the debate on privatization in education.  Given the adverse effects commonly associated with private schooling, the evidence synthesized in this paper indicates that overall, significant positive effects of school choice on quality of education is largely missing, yet effects on access are more pronounced. Such mixed evidence indicates that public authorities and the international donor community may more effectively utilize educational funds in expanding the capacities of the public sector, rather than investing in a parallel form of schooling that does not uniformly provide children their right to education in the absence of residential mobility and tuition fee subsidies. Indeed, discourse and practice seem to be moving towards this end, with the World Bank ceasing support for LFPS earlier in 2022. A powerful proponent of privatization in education in “developing” countries, such events are indicative of an emerging shift away from implementing school choice as a panacea to educational challenges.

Yet, the findings are limited by a focus on quantitative research studies focusing on access and performative aspects of school choice. Qualitative studies, which investigate the causes and drivers of certain outcomes in access and quality at the demand side (parents, students) may elicit deeper insights into how families approach school selection and how cultural factors i.e. prioritizing the education of boys in “developing” country contexts, come into play. Such research is necessary for the formation of well-informed decision-making.

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FOOTNOTES

[1] I recognize that school choice and voucher schemes in their global extensions are not a uniform concept and differ from one another in coverage (“universal or targeted”), geographical focus, aims (promotion of competition or equity and social justice aims) and composition (extent of subsidization; with or without add-on payments) (Verger and Moschetti, 2016).

[2] These effects account for changes in performance of individuals when they are aware that they have been cast into a treatment and/or control group.

[3] A higher amount was issued for girls

[4] Attock, Faisalabad and Rahim-Yar Khan

[5] In general, in parochial communities in Pakistan, moving may not be an option due to agrarian means of livelihood.

[6] The PEF supports foundations in establishing/ operating schools (PEF, n.d.)