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Privatization of Education Term Paper


In some countries, education is not privatized, that is; all parents take their children to public schools irrespective of the parents’ social and economic status.

There has therefore been a debate regarding whether public schools should be dismantled and replaced with a system in which parents are able to choose where to send their children to school.

On one hand, it is argued that some form of school choice can force schools to compete for students and therefore improve the quality of education.

On the other hand, there is the counter-argument that the dismantling of public schools exposes schools in poor communities to financial difficulties due to inadequate funding from governments. The debate has created two opposing sides namely the pro-school choice and the anti-school choice.

This paper is a critical evaluation of the pro-school choice point of view. It is based on the economic models of monopoly and perfect competition. The paper looks at the advantages and disadvantages of allowing public schools to exercise monopoly in the education sector.


One of the key pillars of development of any country is education. The reason is that through education, people are able to learn and acquire new skills, abilities, and knowledge in various disciplines such as law, medicine, engineering, economics, business, public administration among others.

These skills and abilities enable the people to be employed in different sectors of the economy, which increases the gross domestic product of their country.

The ability of education to transform a country can be demonstrated by looking at the differences between countries with low literacy rates and those with high literacy rates. Countries with high literacy rates are better in terms of economic and social development than those with low literacy rates.

Education is therefore one of the areas which governments must pay close attention to in order to realize sustainable development (Baez 12-21).

In some countries, the provision of education is a role which is played by governments through public schools. One of the reasons is that governments are able to establish standard rules and regulations to ensure that children acquire high quality education.

The other reason is that the education sector requires immense spending of funds in the establishment of the physical infrastructure, employment of teachers, and purchase of learning equipment.

The advantage of allowing public schools to exercise monopoly in the education sector is that all children are able to access education irrespective of their social, economic, and cultural backgrounds. The reason is that governments usually provide funding to all public schools.

The funding not only enhances equity in the access of education but also creates a level playing field for all children. In many countries, there are children who come from poor families which cannot afford to pay school fees.

In situations where education is privatized, such children end up dropping out of school due to lack of school fees. As a result, the countries lose crucial human resources (Wolfe 43).

As mentioned above, the provision of education is a role played by governments with the aim of ensuring that children acquire high quality and standardized education. However, according to the pro-school choice point of view, governments should not exercise full control of the education sector so as to avoid monopolization of the sector.

In economics, monopoly refers to a situation in which a particular sector of the economy is dominated by a single firm or player such as the government or a corporation. The firm with monopoly usually dictates the price of goods and services by manipulating their supply.

In many cases, monopolies are associated with exploitation of consumers due to lack of alternatives for the consumers. However, monopolies may not always exploit the consumers because governments may intervene and compel them to reduce the prices of goods and services.

The pricing strategy in a monopoly is not depended on business rivals. The firm which dominates the market sets the price indiscriminately, and is usually at liberty to charge different prices for the same good or service to different customers, depending on their ability and willingness to pay.

In an industry with a monopolistic structure, other small businesses are referred to as price takers. The reason is that they are not able to influence the price of goods and services because of the dominant player.

As a result, they set their prices depending on the price set by the dominant player in the market. Those who deviate from the price set by the dominant player are forced to quit their businesses.

Many monopolies are characterized by barriers to entry (Blythe 26). Such barriers include things like pricing, marketing, and branding. It therefore means for new entrants to enter a monopolistic industry, they must have huge capital.

They also need to invest immensely in marketing their businesses so as to gain a portion of the customers. The reason is that the firms which enjoy monopoly usually invest immensely in branding, which makes it difficult for new entrants to get customers for their goods and services.

According to the pro-school choice point of view, the disadvantage of allowing public schools to exercise monopoly in the education sector is that it leads to deterioration of the quality of education offered in many public schools. In addition, it denies parents the right to choose the type of education their children should acquire and in what type of institutions.

It is important to mention that public schools usually offer standardized education to all children irrespective of their economic, social, cultural, and religious backgrounds. They do not customize education to the needs of different children.

This situation denies the children the opportunity to learn according to their cultural, social, economic, and religious backgrounds. For example, children from certain religious backgrounds may need to learn their religion at school.

However, many public schools do not teach religion because the children come from different religious orientations. As a result, the children acquire education which is not complete as opposed to those who learn in institutions which customize learning to the needs of the children.

The other disadvantage of allowing public schools to exercise monopoly in the education sector is that it leads to a culture of complacency by the public schools.

As a result, the public schools do not to anticipate challenges which may affect the sector. In other words, they are reactive instead of being proactive, a situation which leads to poor quality education.

It is also important to mention that education is not static but it keeps on changing due to social, economic, political, and technological changes. For example, due to advancement in technology, some teachers use computerized methods of teaching such as PowerPoint presentations.

The job market also keeps on changing in terms of the skills which are needed. For example, in the past few decades, proficiency in computer applications has been a requirement which all job seekers must meet before they are employed.

If the public schools in a country do not take the initiative of continuously improving the quality of education, then the learners in that country are denied the right to acquire education which is compatible with the job market.

When they complete their education, they are disadvantaged when seeking job opportunities because they usually lack essential skills which are needed by the employers.

The central argument of the pro-school choice point of view is that education should not be regulated by governments. This argument is based on the economic model of perfect competition. According to this model, all competitive markets are depended on three components namely price, demand, and supply.

In a perfect competition, the three components usually have a direct variation; meaning that a change in one component triggers significant changes in the others. In any market, there are different varieties of products and services.

There are also different types of customers; some prefer low quality and cheap products and services while others prefer high quality products and services.

As a service, education is affected by the forces of demand and supply. The reason is that different parents earn different amounts of income. There are low-income, middle-income, and high-income earners.

The low-income earners take their children to community schools while the high-income earners take their children to national and international schools.

As a result, there is need to privatize the education sector so that all parents are able to take their children to schools which they can afford.

Forcing all parents to take their children to public schools therefore denies the children of high-income earners the right to acquire high quality education in their schools of choice (Morley 32-40).

According to economic analysts, the privatization of education leads to economic growth of a country. The reason is that if education is privatized, local and international investors invest in the sector through establishment of private schools.

The investors also employ qualified teachers and set up a favorable learning environment. They also undertake marketing campaigns to attract learners to their schools.

Such investors are usually taxed by the government of the country and as a result, the government is able to generate revenue from the education sector as opposed to a situation where public schools exercise monopoly in the education sector (Bloom 3-10).

In a perfect competition, all players strive to come up with strategies for gaining competitiveness in their respective industries. If education is privatized, investors in the sector usually invest heavily in differentiation and positioning.

In the field of strategic management, the concept of differentiation refers to the process of making a product or a service popular among customers. It is achieved through description of the unique characteristics of the product or service being differentiated.

The whole idea behind differentiation is to create a market niche for that particular product or service. When customers are made to understand the unique characteristics of different products and services, they are able to make informed decisions regarding different products and services.

If done well, differentiation enables customers to purchase specific products or services in a market flooded with many varieties of products and services.

Positioning entails using various strategies like promotion, distribution of products or services, and production of unique products to build an identity of a particular company in the minds of consumers.

Positioning seeks to stabilize and retain the positions of the differentiated products for a particular company so as to retain the competitive advantage of the company in regard to those products.

Through differentiation, investors in the education sector provide the learners with education depending on the fees which they pay. However, if the sector has many investors in a given country, the investors apply different strategies for ensuring that they attract learners to their institutions of learning.

One of such strategies is the reduction of school fees. However, the reduction of school fees does not necessarily compromise the quality of education in the institutions of learning. The reason is that compromising the quality of education pushes the investors out of business due to stiff competition.

As a result, all the private learning institutions end up providing high quality education at low costs so as to retain the learners and attract others.

It can therefore be argued that the privatization of education not only improves the economy but it also improves the quality of education in a given country. This situation is not possible in countries where public schools exercise monopoly in the education sector.

Perfect competition also compels organizations in a given industry to embrace innovative culture. Innovation refers to the ability to design, invent, and initiate new services or products. It can also refer to the ability to come up with new ways of doing things in an organization.

The main driving force of innovation is creativity, which has to do with using one’s reasoning and thinking capabilities to conceptualize an idea before actualizing it.

In the education sector, the privatization of education enables the investors in the sector to come up with ways of improving the quality of education so that their institutions become competitive.

For instance, the advancement in information and communication technology has led to the emergence of innovative ideas such as virtual learning. Through virtual learning, learning institutions are able to provide education to learners who are not able to pay tuition fees due to financial challenges.

In countries where the education sector is privatized, many people pursue their education while still working due to availability of the virtual mode of learning.

The reason is that private schools treat the education sector as a business and are determined to do all what it takes to meet the needs of their customers (learners). They are also flexible as opposed to public schools which are managed using strict rules and regulations set by governments.

The privatization of the education sector is also necessitated by globalization. Through globalization, people are able to work anywhere in the world irrespective of their cultural orientation.

Globalization has also enabled people to study, marry, and stay in any part of the world. The privatization of the education sector therefore enables people from different countries to choose which schools to take their children.

For example, many ambassadors and expatriate managers take their children to international schools in the countries where they work.

Works Cited

Baez, Benjamin. “Schools and the Public Good: Privatization, Democracy, Freedom, and Government.” Journal of Curriculum Theorizing 21. 2 (2005): 12-21. Print.

Bloom, Jordan. “Privatization by Degree.” The American Conservative 11. 3 (2012): 3-10. Print.

Blythe, Jim. Principles and Practice of Marketing, Farmington: Cengage Learning, 2006. Print.

Morley, John. “For-Profit and Nonprofit Charter Schools: An Agency Costs Approach.” The Yale Law Journal 115. 7 (2006):32-40. Print.

Wolfe, Alan. School Choice: The Moral Debate. Princeton, N.J.: Princeton University Press, 2009. Print.

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1. IvyPanda. "Privatization of Education." June 21, 2019. https://ivypanda.com/essays/privatization-of-education/.


IvyPanda. "Privatization of Education." June 21, 2019. https://ivypanda.com/essays/privatization-of-education/.


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