Sanjeev Sabhlok's blog

Thoughts on economics and liberty

A note on the history of political corruption in England

Came across this during a piece of research I was conducting. Very valuable historical note.

Sanjeev

EXTRACT

An extract from ACTING TOGETHER AGAINST CORRUPTION – Tales From History – a TI Australia perspective Peter G Willis, June 2001, Jakarta. (from Transparency International website: http://www.transparency.org.au/tia_papers.php?#bibliography

HONEST ELECTIONS OF HONEST POLITICIANS

An elected national parliament lies at the heart of any integrity system, based on democratic accountability. Its task is simply stated: to express the sovereign will of the people through their chosen representatives, who, on their behalf, hold the Executive Government accountable on a day-to-day basis.

If the national assembly is seen as a collection of rogues who have bought, bribed, cajoled and rigged themselves into positions of power, a parliament forfeits whatever respect it might otherwise have enjoyed, and effectively disables itself from promoting good governance and minimizing corruption–even if it wants to do so.

Clean elections and clean Parliamentarians do not guarantee honest and clean government, nor do they eliminate all corruption. They can only reduce its extent, significance and pervasiveness.

Eighty years ago, in a case on a corrupt politician accused of selling access to Ministers, an Australian High Court judge wrote: 'according to [history textbooks], bribery of members was often exercised, and especially by King William III, out of secret service funds.' Put most simply, bribery of members of the United Kingdom Parliament was not the aberration of single reign. Out and out corruption was the main means of securing election to Parliament and of forming Government and of keeping in Government for over a hundred years [from 1660 – 1790 CE]. For fifty years longer, election to Parliament remained a haphazard and gerrymandered affair, culminating in a great battle to create full democratic elections and the Reform Act of 1832.

'Ministers and magnates imposed some sort of pattern by 'influencing' the elections … A member toed the line because of one, or a combination of devices' – the conferral on the member or a friend or relation (or, at least, the promise of) a range of perks, contracts, pensions and paid inducements which would make our head spin. Not only were governments bought, but elections too: Thus Lord North, Prime Minister could write to King George III accounting for the election of 1782: 'the whole expense is £103,765/ 15s/ 9d, … a sum larger, but not very considerably larger than has been paid on other such occasions of similar nature…' This was an enormous sum-not spent on official Electoral Commission machinery, but in paying candidates and the controllers of the seats.

HOW CHANGE CAME ABOUT

Periodically over a century [from 1729 to 1832], titanic battles were fought, little by little to overcome these deeply embedded features.

Persistently, the reforms were piecemeal, inconsistent, full of loopholes and fiercely resisted. They came in bursts after long lulls, not in a continuous stream.

[Reform] often required some overwhelming scandal or crisis to galvanize opinion or provide the impetus for the final battle, bringing the doubters and the 'middle' across to the side of the reformers.

The first great wave of systematic reforming legislation [in 1782 to 1785], was catalyzed by a famous denunciation of patronage by the Executive power and corruption in the public service and government. This debate was led by two famous parliamentarians of great ability and bravery. The leading speech was privately published in pamphlet form and was immediately and widely distributed (there was no official public record of proceedings in those days), building widespread support among voters and the non-voting general public alike.

This provided an impetus to break down the century-long procedures and habits. Yet the battle for 'Economical Reform' took several generations to work its way through the English political system. Accompanying the campaign was a high profile prosecution for corruption of a public official by the House of Commons. This was the impeachment of the Governor-General of Bengal (Warren Hastings), excruciatingly drawn-out in the Upper Chamber of Parliament between 1788 and 1795. Although ending in exhausted acquittal, this impeachment too played its part in warning those who were corrupt that there had been a change in sentiment and standards.

Irony abounds and reminds us that there is no inexorable law of progress, however much it all appears a neat process in hindsight: the initial period of reform was interspersed by an election at which the Prime Minister was assured by the King's parliamentary agent that a favourable majority would be obtained through bribery of the voters.

“eighteenth century English Government was based on an elaborate web of what the polite call 'patronage', but which we can call corruption.” At that time, the Secretaries and Under-secretaries of State, the senior government servants of the day like so many other characters in constitutional history, were at some stage in the metamorphosis from personal servant to state official. It was only the gradual removal of the Crown from daily political battle which led in equal measure to the removal of the body of the public service from partisan politics. Thus a step towards the 'neutrality' of the public service which we take as a bulwark of our version of democracy.

Two barriers to the creation of our modern public service remained. They are telling.

the recruitment of the public service remained locked in the patronage system. In summary, said the prime designer of the modern meritocratic public service in the UK, the public service was staffed with 'sickly youths whose parents and friends … endeavour to obtain for them employment in the service of the Government … where they may obtain an honourable livelihood [that is, a good salary] with little labour and no risk …'

With the support of one leading reforming Minister, a group of officials, zealots at the heart of Whitehall, waged a 15-year campaign to change the whole Civil Service. Eventually Parliament commissioned a Report, which established the prime features of the 'Westminster' model of the public service or civil service: entrance based on merit (competitive examinations) rather than patronage and connection, and a series of rules and expectations, to create and govern a body of advisers with 'sufficient independence, character, ability and experience to be able to advise, assist, and to some extent influence, those who are from time to time set over them'.

As the foremost modern Whitehall-watcher puts it: 'Once achieved, the principle of the great reform – that recruitment to the Civil Service should be determined by merit and not by connection – acquired the status of a self-evident truth '.

Continue Reading

Educating our children: A free market in schools

(This article of mine was published in the July 2009 issue of Freedom First.)

In the May 2009 issue of Freedom First I suggested that in addition to ensuring defence, internal security and justice, the free society must commit to equality of opportunity (EO). Delivering EO requires removing discriminatory obstacles to achieving public office, ensuring a good universal school education system, and guaranteeing a social minimum.

School education as a key element of equal opportunity

No child’s future should be jeopardized because its parents happen to be poor. We must guarantee good school education (including vocational training, where appropriate) to all children who want to study to year 12 (or age 18). Twelve years of education has now become a minimum given the complexity of technology that must be mastered in order to become a productive member of society. Such education will generate an enormous economic dividend for India through positive externalities including social capital formation.

In this article I outline how we can successfully deliver high quality school education at a relatively modest cost to the taxpayer (details are available in my book, Breaking Free of Nehru, Anthem Press, 2008).

A fully privatised school system

Children from rural areas or slums cannot even dream of equal opportunity today. These luckless children are destined for a lifetime of failure by the inefficiencies and corruption entrenched in our government school sector. The best these children can hope for is to get some patchy education in government schools where such schools exist (many government schools are found only on paper, or teachers are paid without attending school).

But why does a government need to operate schools? Managing a school is a hands-on exercise, much like managing a business, and governments are terrible at managing anything that must deliver value. Government officials and teachers have little or no incentive to deliver world-class education at the lowest possible cost. In comparison, the private sector can only survive if it delivers value for money. Therefore, parents who can afford it, prefer to send their children to private schools.

Governments are also unusually soft on their own failures. A Director of School Education in a state government will demand stringent standards from private schools even as he ignores the shoddy education provided by the government’s own schools. Governments should therefore not directly manage schools. However, they could regulate school standards, noting that self-regulation by a body of experts is the preferred way for such a task.

As a first step, our governments should stop building, owning, and maintaining schools. That would include an end to the appointment of lakhs of school teachers, an activity that is a source of great corruption and favouritism. School assets (bundled with a long-term lease on the school’s land) should be auctioned to educational consortiums that are at least partially owned by local teachers and residents. I have suggested a transitional mechanism for this in my book that will protect existing teachers.

This will immediately ensure that the incentives of school managers are better aligned to the needs of the local community. Further, the lands and buildings belonging to schools will also be much better maintained and utilised.

Customised vouchers for each child

Privatisation is only the first part of this model. Parental choice is the other part. School education vouchers would be issued by the government for each child and mailed out to parents. Children of poor parents would be issued high-value vouchers. Rich parents will not get any vouchers. The lower economic classes may get vouchers, depending on how much it costs to deliver good education. All parents would thus be empowered to send their children to almost any school they want to. All they would need to do is to pay a top-up amount over and above the value of the voucher.

Under the current model, government schools receive funds unrelated to the size or nature of their enrolment(s) or educational outcome(s). In the new model, they would get money based on a reimbursement of vouchers. They would therefore need to enrol as many children as they can. They will have to go out and literally beg the poorer parents – such as the parents of child labourers – to send their children to school. Where necessary, schools would provide a breakfast for these children: anything to ensure that parents agree to send their children to school. Enrolment rates would therefore shoot through the roof.

Second, schools would need to ensure that the children they have enrolled achieve the required educational standards. Only then will they be able to invoice the government against these vouchers. The more the number of children these schools enrol and pass out at an agreed, independently tested standard, the more the money they will receive.

Note that through high-value vouchers for poor parents, schools in economically backward areas will be able to afford high salaries for teachers and potentially attract even better teachers than schools in wealthy urban areas. Good schools would thus emerge in rural areas and slums for the first time in India’s history. This would dramatically increase both the quality of education and competition in the school market. Very little central planning or quality control will be needed as the market will sort out good schools from the bad. (A self-regulating body of school experts would help.)

Above all, the preferences of parents in selecting the right school for their children will be honoured, and who can be a greater well wisher of a child than its parents?

Raising money for the vouchers

It is true that defence, police, and justice must take first priority for any government. However, universal high quality school education must receive a high priority as well. The system outlined above will not cost too much because the current funds allocated to tertiary education would be shifted entirely to school education. In the tertiary education sector, students would be asked to pay their fees through loans issued by the government (I’ll talk more about this topic in a separate article).

Second, funds needed beyond that could be raised through capital markets as a long-term investment loan. This should be easy, given that there is nothing in any society that yields higher returns on investment than good school education. Third, schools will be permitted to use their land and buildings for commercial purposes after school hours, thus using their assets more productively and keeping the fees in check.

A free market in schools of the sort described above is guaranteed to deliver high quality education – as guaranteed to succeed as India’s current socialist method is guaranteed to fail. There is an open and shut case for change.

Freedom Team of India

Sadly, this simple and effective model will remain a pipedream since ruling politicians in India currently use the school education system almost purely to ‘mint money’ for themselves. Education is simply not their goal. Money making is. To implement such a system liberals will need a mandate from the people of India to form an ethical, liberal government. The Freedom Team of India (http://freedomteam.in) is pushing ahead in that direction. I would encourage you to find out more about the Team.

Addendum

A new RCT look at educational vouchers From Matthew M. Chingos and Paul E. Peterson (pdf):

In the first study using a randomized experiment to measure the impact of school vouchers on college enrollment, we examine the college-going behavior through 2011 of students who participated in a voucher experiment as elementary school students in the late 1990s. We find no overall impacts on college enrollments but we do find large, statistically significant positive impacts on the college going of African American students who participated in the study. Our estimates indicate that using a voucher to attend private school increased the overall college enrollment rate among African Americans by 24 percent.

Private Schooling In India: Results from a Randomized Trial
by Alex Tabarrok on February 5, 2014

THERE IS NOT THE SLIGHTEST CASE TO HAVE A SINGLE GOVERNMENT SCHOOL

"private schools achieved equal or better outcomes at one-third the cost"

ADDENDUM

More evidence that all schools should be free schools

Continue Reading

A note on the outreach effort of FTI in Indore

The Freedom Team of India has come of age. It was officially born as a legal entity on 1 July.

More importantly, its first outreach effort in Indore has shown real promise, much to do with the outstanding organisation by L.K. Kandpal and Ajay Anand, as well as leadership by Shantanu Bhagwat. Three other FTI members helped/participated, as well.

Reports on the Indore outreach effort will be provided in the next issue of Towards a Great India (expected to be released tomorrow). But I thought it worthwhile today to guide visitors to this blog to the following page: http://freedomteam.in/outreach-indore-09. Visit it! You'll be impressed.

A strong beginning for something that has essentially started in cyberspace. The search for outstanding leaders in India is now on in real earnest.

Regards
Sanjeev

Continue Reading
Continue Reading
Social media & sharing icons powered by UltimatelySocial