Traditionally, marketization and privatization of education might be perceived as a typical American or British phenomenon. Though, over the last decades, these trend have become more visible in the European educational market as well.
Nearly everywhere where there is a supply and demand we find a market.[1] These markets are strongly interconnected which leads to the fact we are surrounded by them continuously.[2] But while markets are oftentimes perceived as nothing but an economic structure, they are a sociological phenomenon as well and for example used to solve political problems or for the sake of development research.[3]
The network tradition, institutionalists and the performative school of thought
From a sociological point of view, at least three different approaches of the concept ‘market’ can be distinguished; the network tradition, the institutionalists and the performative school of thought.[4] The network tradition perceives markets from a perspective of relations, where the different actors form the social structure of the market.[5] The Institutionalists perceive markets from a perspective of norms, market rules and power[6] and the performative school of thought explains markets as the calculative processes behind economic actions.[7]
A relational approach to markets can be understood by investigating when a market comes into existence. The supply and demand relation that was discussed earlier, is thereby a clear example of a relational structure between two or more actors in the market. Where one actor has a need, the other actor has the supplies to fulfill those needs.
The way in which the transmission of the goods fulfills those needs could be fit into the domain of the Institutionalists since the norms, market rules and power structures that are present in the transmission of goods are of strong influence on the structure of the market as a whole. The calculative processes deriving from the structure of the market, can be entitled to the domain of the performative school of thought.
How the three market approaches complement each other
The three approaches of the market complement each other while they simultaneously highlight different aspects of what a market is. It is very likely that the three discussed perspectives on the market are not exclusive, where the three approaches find common ground is therefore useful, to get a more profound and complete idea of what a market exactly is.
What the three approaches have in common, is that they perceive the market as a ‘social arena’ consisting of the government, customers, companies, suppliers of the companies and workers, which are all affected in their behavior through their connectedness.[8] Economic activity can therefore not take place without a certain social structure which means that a market is not merely an economic activity but a social one as well.
Theories to support this belief can be found in historical studies for example, which are claiming that trade finds its origin in the symbolic exchange of gifts which established social relations and trust.[9]
The relationship between the market and the educational system
When a market is perceived as an economic and social structure, it finds itself on comparable terrain as the educational system. Where the market is driven by economic and social forces, the educational system is to a certain extent responsible for the economic success of an individual and that of the market as a whole, while it is simultaneously responsible for the transmission of norms and values and thereby influences the social forces in society.
At the same time, the economic connection with the educational system comes forward in the extent to which it is exposed to the free market. Not only will this interfere with funding, it can be of influence on elements such as competition and accessibility as well. The motivation to choose for a fully state-funded educational system, privatization of education or another organization of the educational system, are therefore interesting to investigate in relation to educational policy.
In this blog, different organizations of educational systems will be investigated to compare transformations of educational systems in different countries and to analyse differences and similarities in its structure, organization and usage. Thereby special attention will be given to arguments for promoting privatization of education, marketization or nationalization of the educational system.
Global privatization of education
To what extent the privatization of education is desirable, is an ongoing debate in every nation. Different examples from all over the world show extremes of fully state-funded education, privatized education and hybrid forms that find themselves somewhere in between.
The British and American educational systems are known for their high degree of privatization which has crossed their national borders with the international expansion of educational services and products.[10]
A central actor within this field is the United Kingdom. The reason the UK has the ability to capitalize upon the international export of educational services, is its high-ranking educational reputation.[11] This respected reputation has made space for the growth of educational companies in both the UK and America since American education has a comparable international reputation as the UK.[12]
Privatization of education as a business model
The lucrative educational market has invited several companies to enter the market. An example of that, is the British company ‘Cambridge education’ which has been given the task in the USA to introduce a concept based upon the ‘English inspection model’, allowing schools in the New York region to develop a ‘school reviews program’.[13]Additionally, Cambridge Education runs projects of quality review programs of charter schools in the United States.[14]
Another example of private educational services can be found the other way around in a project of the American company Edison Schools. Edison Schools has been given the task to improve grades and scores for national tests of students until the age of 14 in London.[15]
The idea behind this service, or at least the way it is marketed by the company, is to serve as a beneficial tool for all students, since when it is accessible to all students it could have the ability to improve meritocracy in the educational system. According to their marketing, it has the ability to reduce financial- and other limitations for parents to provide their children with additional training to successfully pass the national examinations.[16]
The international expansion of companies like Edison Schools and Cambridge Education are a clear example of the modern possibilities for the global expansion of privatized education. The educational market has therefore shifted from the national to the global stage and raises the question among nations whether the privatization of education is desirable.
As mentioned before, some societies can find themselves in an ‘in-between’ position where the educational market is partially privatized and partially public due to the general transformation of the public sector.[17]The extent to which the free market penetrates the educational system is therefore diverse and can be difficult to validate. Fact is, that as a result of globalization countries are forced to reflect upon the desirability of the privatization of their educational system.
The marketization of education
The projects of Edison Schools and Cambridge Education are an example of the global marketization of education. An important reason to open the international market for educational companies can be that at least in theory, it could open up the door to more competition in the educational market. Since competition is oftentimes perceived a strong incentive for the optimization of quality, the capitalization of education might from that perspective lead to education of the highest quality.
How that quality is defined might differ strongly between countries or even regions since it is strongly dependent on what competences need to be achieved by the students and how those are defined in the first place.
It is for that reason that the privatization of education can never be fully autonomous but is always related to the educational policy of the state it operates in. It might therefore be useful to speak of a marketization of education where the optimization of the educational system is left to the market and private- or public education are merely the instruments to stimulate and balance the marketization and thereby quality improvement. A combination of public- and private education would in that line of theory be useful to offer different types of relevant knowledge.
Mode 1 and mode 2 knowledge
When speaking of relevant knowledge, different types of knowledge can be spoken of which can be indicated by different ‘modes’. ‘Mode 1’, can be seen as traditional scientific knowledge[18] and ‘Mode 2’ as knowledge of a more heterarchical and transient nature.[19]
Both types of knowledge have their own strength but the rise of ‘global capitalism’ has increased the demand for the faster mode 2 knowledge.[20] Since globalization has expanded the competitive playground for capitalistic countries to the international stage, the stimulation of marketization, with or without elements of privatization of education, is becoming an increasingly important question in the search for optimal efficiency within organizations such as the educational system.[21]
The marketization of education can be perceived as an answer to meet the needs of mode 2 knowledge, since the competition could give a strong incentive to offer the most up-to-date and relevant knowledge for the lowest price.[22]
The idea that high quality education would become accessible for disadvantaged children is very appealing for many people and the marketization of education is seen as a tool to turn that into reality.[23] By turning students into customers schools would be encouraged to enter niche markets and serve students in the best way possible.[24]
Whether marketized education is indeed a suitable option to offer more mode 2 knowledge and offers higher quality education at a more cost-efficient rate, is rather difficult to investigate. The main reason for that, is that it is very difficult to conduct research about the outcome of competitive incentives in a local context and what influence it has on the behavior of educational organizations.[25] Promoting the marketization of education is therefore not only based on facts, it is based on beliefs as well.
Marketization in Swedish education
While marketization and privatization are oftentimes perceived as inseparable, the Swedish educational system shows that marketization can exist without privatization through the implementation of a publicly funded voucher system.[26] By doing so, The Swedish primary- and secondary educational system have gone through a transformation allowing free school choice and commercial educational enterprises.[27]
A motivation to choose for such a construction, could be to allow competition in the school market, while simultaneously securing the access of education through public funding. It can in that case be seen as the earlier mentioned ‘hybrid’ form of education, where elements of public- and private education meet.
Sweden comes from a tradition of being one of the most egalitarian educational systems in the world with a centralized and regulated educational market.[28] Reasons to promote marketization makes it very likely that educational policymakers in Sweden believe in the improvement of the quality of education through marketization even though the funding of education remains publicly regulated.
A possible reason behind the Swedish marketization of education
To find an explanation why the marketization of education is promoted in Sweden while complete privatization is not, an answer could be found in housing segregation. In Stockholm, which is by far the biggest educational market of the country, housing segregation has for example led to an increasing socially stratified school system.[29]
Since primary- and high school students are often geographically limited in their school choices, a complete privatization of education might set economical limitations to disadvantaged parents and accelerate the stratification of the school system. Securing the economic accessibility of education, eliminates the financial limitation to get access to all schools.
While economic limitations can play a central role in the stratification of education, other elements are important as well, such as the parents’ educational level, income level and type of residential area of the household.[30]Additionally, the ethnic background of parents are of importance too.[31]
In other countries, such as France, the UK, Germany, Belgium and the Netherlands, segregation based on ethnic background can be observed as well.[32] Therefore the stratification in the educational system seems to be a more complex problem than just an economical challenge. We can therefore draw the conclusion that social stratification in the society has a tendency to be translated into the educational system.
In order to fight or accelerate that stratification, policymakers of education can apply different strategies which among others involves the marketization of education.
Educational policy in the Netherlands
While to some extent the Netherlands might face similar challenges as Sweden regarding social stratification and segregation, the Dutch approach towards educational reforms is different than the Swedish example.
Just like Sweden, the Dutch primary- and secondary education is fully funded by the government.[33] The difference between the two, is that the marketization has actively been given more room in the Swedish example, while it has not been in the Dutch.
In the Netherlands, the incentive to perform better as a school, comes from additional ‘reward funds’ which are financial bonusses when a school performs well according to the ministry of education.[34] Simultaneously, a school can get assigned additional funding when more budget is needed to realize certain quality improvements.[35]
Schools receive a fixed yearly budget combined with an additional budget based upon the amount of students that are signed in at the first of October.[36] Just like the Swedish educational system, schools are in that way rewarded for attracting more students.
Where the Swedish and Dutch system differ, is that the Swedish system might give more room to private companies in the educational market because of the voucher system.
The Swedish vouchers entitle a ‘bag of money’ to each student which will be paid for by the government to the school of choice, turning the students into ‘consumers’ where the schools become ‘producers’.[37] Whether that school is public or based on private initiatives does not matter and additional fees to the voucher are forbidden.[38] In that way, public schools are challenged by the competition of private educational initiatives.
In the Netherlands it is possible to start a private educational initiative in the form of a private school as long as it fits the criteria of the ministry of education. The difference compared to the Dutch public education though, is that private schools are allowed but not eligible for funding from the government.[39] Educational companies can therefore not compete and challenge public schools in the same way as in Sweden since they are economically disadvantaged.
Because of this, the incentive for quality improvement of Dutch schools is completely based upon the reward funds and is not exposed to the competition of external educational companies as in Sweden.
The Dutch ministry of education states that over time, Dutch schools have been given more freedom regarding their budgets since the regulation around the expenses of schools has been reduced. Where nearly all expenses had to be justified directly to the ministry in the past by sending in receipts to the ministry, schools are now free to decide how they spend their resources and justify those in a yearly report to the ministry.[40]
The ministry itself acknowledges this change was primarily a result of the time demanding administration.[41] Since the expenses still need to be justified in the yearly report, it is arguable if schools indeed have more freedom over their spending pattern to for example invest in more competitive education.
Spanish education: tuition fees as extrinsic motivation
Educational policies around marketization and privatization will automatically be related to the funding of education, since regulation around funding needs to be established. A good example of where these approaches differ, is within the European higher education.
While the Swedish higher education is entirely publicly funded and free of charge[42], higher education in the Netherlands is not and demands an annually increasing payment from the student.[43] To what extent and in what form policymakers will nationalize or privatize education is therefore not only a matter of marketization in the educational market, it is a financial matter as well.
While securing the accessibility of higher education could be an important argument for complete government-funded education, introducing tuition fees could have the ability to influence and increase student efforts.[44] In 2012, Spanish public universities introduced a fee-per-module system based on this belief, where fees increase every time a student has to retake a module.[45]
According to the research, these changes did primarily improve the academic results of economically disadvantaged students and not those of all students in general.[46] The funding of education and educational policies can therefore be utilized to support the maintenance or change towards a desired result or outcome of the educational training.
Conclusion
To get a deeper understanding of how marketization and privatization influence educational policies, it is important to be aware of the complexity of reforms in educational policymaking. Changes in policy can act like a chain reaction where particular input leads to a particular outcome, although this might strongly depend on the variables that are present.
In the case of marketization for example, different approaches can be utilized to increase the probability of a certain outcome although the actual result on the market can be difficult to investigate. Educational policymaking is therefore not only an economic policy, it is part of a belief- and political system as well.
In Sweden for example, marketization of primary- and secondary education is promoted while privatization in the form of fee-paying schools is not encouraged. In the United States and the UK, privatization even expands across the borders, trying to support local public- or private educational programs.
Other countries such as the Netherlands, limit the marketization of primary- and secondary education more compared to Sweden, but choose for tuition fees in higher education while these are absent in Sweden. Additionally, Spain uses tuition fees to stimulate the extrinsic motivation of students further, giving them an incentive to work harder and graduate earlier.
All these measures are clear examples of strategies. They are implemented based upon a belief of expected results and can change over time while the society and market are changing as well. The question of what educational policy is good is therefore subjective and the educational policy deriving from it is strongly influenced by political beliefs.
Regardless of these beliefs, marketization and privatization can be seen as tools that can be utilized to encourage or diminish the influence of the free market on education. Depending on the expected and desired result of these policy changes they both shape and are shaped by educational policy at the same time.
References
Andersson, Roger. Reproducing and reshaping ethnic residential segregation in Stockholm: The role of selective migration moves. Swedish Society for Anthropology and Geography; 95(2), 2013; p.163-187.
Aspers, Patrik. Markets. (1st edn Cambridge: Polity Press, 2011).
Ball, Stephen. Privatising education, privatising education policy, privatising educational research: network governance and the competition state. Journal of Education Policy; 24(1), 2009; p.83-99.
Beneito, P., Boscá, J.E & Ferri, J. Tuition Fees and Student Effort at University. (Fedea Policy Papers, 2016).
Fligstein, Neil., Dauter, Luke. The Sociology of Market. The Annual Review of Sociology; 33; 2007; p.105-128.
Forsberg, Håkan. School competition and social stratification in the deregulated upper secondary school market in Stockholm. British Journal of Sociology of Education; 39(6), 2018; p.891-907.
Gibbons, Michael., Limoges, Camille., Nowotny, Helga., Schwartzman, Simon., Scott, Pete & Trow, Martin. The New Production of Knowledge. The Dynamics of Science and Research in Contemporary Societies. (1st edn London: SAGE, 1994).
Lubienski, Christopher., Gulosino, Charisse & Weitzel, Peter. School and Competitive Incentives: Mapping the Distribution of Educational Opportunities across Local Education Markets. American Journal of Education; 8(4), 2009; p.601-647.
Rider, Sharon., Hasselberg, Ylva., Waluszewski, Alexandra. Transformations in Research, Higher Education and the Academic Market: The Breakdown of Scientific Thought. (1st edn Dordrecht: Springer, 2013).
Rijksoverheid; Collegegeld; https://duo.nl/particulier/collegegeld.jsp; Accessed 11-01-2020.
Rijksoverheid; Financiering voortgezet onderwijs; https://www.rijksoverheid.nl/onderwerpen/financiering-onderwijs/financiering-voortgezet-onderwijs; Accessed 11-01-2020.
Rijksoverheid; Kan ik een particuliere school oprichten?; https://www.rijksoverheid.nl/onderwerpen/basisonderwijs/vraag-en-antwoord/particuliere-school-oprichten; Accessed 11-01-2020.
Rijksoverheid; Overheidsfinanciering onderwijs; https://www.rijksoverheid.nl/onderwerpen/financiering-onderwijs/overheidsfinanciering-onderwijs Accessed 11-01-2020.
Uka.se; Hur finansieras högskolan?; https://www.uka.se/fakta-om-hogskolan/universitet-och-hogskolor/hur-ser-verksamheten-ut/hur-finansieras-hogskolan.html; Accessed 11-01-2020.
[1] Aspers, Patrik. Markets. (1st edn Cambridge: Polity Press, 2011). p.17.
[2] Ibid ..p.18.
[3] Ibid. p.56.
[4] Fligstein, Neil., Dauter, Luke. The Sociology of Market. The Annual Review of Sociology; 33; 2007; p.107.
[5] Ibid.
[6] Ibid.
[7] Ibid.
[8] Ibid.
[9] Aspers, Patrik. Markets. (1st edn Cambridge: Polity Press, 2011). p.62.
[10] Ball, Stephen. Privatising education, privatising education policy, privatising educational research: network governance and the competition state. Journal of Education Policy; 24(1), 2009; p.93.
[11] Ibid. p.94.
[12] Ibid.
[13] Ibid.
[14] Ibid.
[15] Ibid.
[16] Ibid.
[17] Rider, Sharon., Hasselberg, Ylva., Waluszewski, Alexandra. Transformations in Research, Higher Education and the Academic Market: The Breakdown of Scientific Thought. (1st edn Dordrecht: Springer, 2013). p.10
[18] Gibbons, Michael., Limoges, Camille., Nowotny, Helga., Schwartzman, Simon., Scott, Pete & Trow, Martin. The New Production of Knowledge. The Dynamics of Science and Research in Contemporary Societies. (1st edn London: SAGE, 1994). p.3
[19] Ibid.
[20] Fligstein, Neil., Dauter, Luke. The Sociology of Market. The Annual Review of Sociology; 33; 2007; p.121.
[21] Ibid.
[22] Lubienski, Christopher., Gulosino, Charisse & Weitzel, Peter. School and Competitive Incentives: Mapping the Distribution of Educational Opportunities across Local Education Markets. American Journal of Education; 8(4), 2009; p.601.
[23] Ibid.
[24] Ibid. p.602.
[25] Lubienski, Christopher., Gulosino, Charisse & Weitzel, Peter. School and Competitive Incentives: Mapping the Distribution of Educational Opportunities across Local Education Markets. American Journal of Education; 8(4), 2009; p.602.
[26] Forsberg, Håkan. School competition and social stratification in the deregulated upper secondary school market in Stockholm. British Journal of Sociology of Education; 39(6), 2018; p.891.
[27] Ibid.
[28] Ibid.
[29] Ibid.
[30] Ibid. p.894.
[31] Ibid. p.896.
[32] Andersson, Roger. Reproducing and reshaping ethnic residential segregation in Stockholm: The role of selective migration moves. Swedish Society for Anthropology and Geography; 95(2), 2013; p.163.
[33] Rijksoverheid; Financiering voortgezet onderwijs; https://www.rijksoverheid.nl/onderwerpen/financiering-onderwijs/financiering-voortgezet-onderwijs; Accessed 11-01-2020.
[34] Ibid.
[35] Ibid.
[36] Ibid.
[37] Forsberg, Håkan. School competition and social stratification in the deregulated upper secondary school market in Stockholm. British Journal of Sociology of Education; 39(6), 2018; p.892.
[38] Ibid.
[39] Rijksoverheid; Kan ik een particuliere school oprichten?; https://www.rijksoverheid.nl/onderwerpen/basisonderwijs/vraag-en-antwoord/particuliere-school-oprichten; Accessed 11-01-2020.
[40] Rijksoverheid; Overheidsfinanciering onderwijs; https://www.rijksoverheid.nl/onderwerpen/financiering-onderwijs/overheidsfinanciering-onderwijs
Accessed 11-01-2020.
[41] Ibid.
[42] Uka.se; Hur finansieras högskolan?; https://www.uka.se/fakta-om-hogskolan/universitet-och-hogskolor/hur-ser-verksamheten-ut/hur-finansieras-hogskolan.html; Accessed 11-01-2020.
[43] Rijksoverheid; Collegegeld; https://duo.nl/particulier/collegegeld.jsp; Accessed 11-01-2020.
[44] Beneito, P., Boscá, J.E & Ferri, J. Tuition Fees and Student Effort at University. (Fedea Policy Papers, 2016). p.1
[45] Ibid. p.31.
[46] Ibid. p.32.