Decentralization and Privatization: Education Policy in Chile

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Abstract
Many countries have experimented with decentralization and privatization policies in hopes of increasing public sector efficiency. This article explores the impact of decentralization and privatization of education in Chile. Decentralization did have some benefits such as improved administrative efficiency and greater productive efficiency. However, government size, as measured by the total personnel working in the education sector, increased under decentralization. Privatization of education in Chile created a type of voucher system. Although educators are more accountable to parents who compare products, the greatest problem is that schools do not necessarily respond to competition by promoting better quality education. Comparisons of student performance in public and private schools in Chile is not conclusive, but national average scores have not risen even though private provision of education has expanded dramatically while public education has waned. Finally, both decentralization and privatization resulted in greater inequity in expenditures and in the performance of students from different income groups.

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