Economic Rationalism 1

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Journal of EducationalAdministration

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Journal of Educational

Administration,

Vol. 39 No. 4, 2001, pp. 346-358.

# MCB University Press, 0957-8234

Received April 2000Revised September 2000Accepted November2000

Economic rationalism andeducation reforms indeveloped countries

Y.L. Jack LamThe Chinese University of Hong Kong, and

Brandon University, Manitoba, Canada

Keywords Economic conditions, Education, Efficiency, Productivity, Accountability

Abstract In contrast to those of the earlier decades, recent school changes and educational reforms in developed countries are not governed by ideologies originated from specific social or national contexts, attempting to address unique specific interests or educational concerns. Rather,

the universal `èconomic rationalism'' is contended to be the primary driving force shaping thenature and spirit of the global educational reforms. In support of this conviction, reform literature prepared by scholars from America, Canada, England and Australia is examined. By identifying some common threads extracted from diverse articles, a general model is woven, linking rationalistic principles such as efficiency, productivity and accountability with various formats of reforms. Specific objectives include cost-reduction, higher rate of social return, more reliable and comparable outcome assessment and greater market (public) control. Public educators should realign themselves to this paradigm shift if they are to retain their professional leadership in amore turbulent environment.

IntroductionAll over the world, the public education system is grappling with anunprecedented wave of change ± unprecedented in its magnitude and scope asno area has been deemed exempt from close scrutiny. Educational goals andobjectives are revisited and rewritten. School systems have been restructured.Decision-making mechanisms within the school organization have beendecentralized. Curricula have been revised. Stakeholders have greateropportunity for direct involvement in all aspects of school operation.

The pace of change also is unprecedented, as it is unleashed in a climate of urgency. In the USA for instance, there were no less than 1,000 pieces of legislation within five years after the release of the document on `À nation atrisk'' (Negroni, 1992). In England, preceding the enactment of The EducationReform Act, only eight weeks were set aside for consultation. As Aldrich (1994)

observed, `̀ the politics of partnership had been replaced by the politics of confrontation, the agenda of consensus by that of radical reform''. In Manitoba,Canada, over five dozen bills were rushed through the Legislative Assembly inthe fall of 1996, with an undisguised restriction on members engaging indebates (Lam, 1998). In Australia, the loss of faith in connecting quality of public education with a corresponding increase of public resource (McGaw,1994) heightened the tension between politicians and educators (Harrold, 1998).Coupled with a tighter schedule is an attempt by the concerned governments inthese countries to regain their initiatives and to exercise greater control over

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the direction of reforms, irrespective of whether they have the backing of educators or not (e.g. Townsend, 1998).

Types of reform

Basically, on a worldwide basis, there are three types of reform. The first,advocated strongly by the World Bank is what is known as ``finance-driven''reform (Farrell, 1993; Psacharopoulos et al ., 1989; World Bank, 1990).Constituting this reform are such strategies as shifting public funding fromhigher to lower levels of education, giving more students greater educationalopportunity. There will also be increases in school fees to bridge the gapbetween the actual cost and subsidies. Further, school expenditure will bereduced by holding down salary bills, increasing class size and making greateruse of teaching in shifts.

The second type of reform is known as `èquity-driven'' reform. By definitionand design, equity-driven reform aims at providing high-quality basiceducation or greater educational opportunities to the disadvantagedpopulations. These include students `̀ at risk'', students from low-incomefamilies, students with special physical and mental needs, women and ruralpopulations. Reallocation of resources within the educational system, creationof educational programmes, development of non-formal education andalternative methods of program/course delivery, such as distance education(UNESCO, 1993), are some of general strategies.

The third type of school reform is what is known as ``competitiveness-driven'' reform. Underlying this approach is the recognition (OECD, 1992) thatthe human factor is critical to success in competitiveness and prosperity.

Competitiveness-driven reform stresses organizational restructuring, greaterprogram and fiscal control to improve resource management (Levin, 1994;Lockheed and Levin, 1993; Lockheed and Verspoor, 1991; Carnoy, 1993).

Despite variations in design and purposes, the three types of reform are notmutually exclusive. Under the competitive model, some schools in Englandattempt to exclude children with behavioral difficulties (Deem et al., 1993).This, however, is not endorsed by the Government as `èfficiency'' (or quality)cannot be compromised by `̀ equity'' (Simkins, 1994).

In the United States, Federal proposals, such as America 2000, H.R. 3320, S.2,touch on the Constitutional nerves as to what impact competitiveness-drivenreform might have on the equity issues such as racial, ethnic and

socioeconomic segregation (Stedman, 1992). That competitiveness-drivenreform does not necessarily preclude equity-driven reform is clearly illustratedin four successful reform programs. Henry Levin's Accelerated School Project,Theodore Sizer's Coalition of Essential Schools, James Comer's SchoolDevelopment Program and Robert Slavin's Success for all (Lockwood, 1995), allpoint to the fact that effectiveness can be achieved without sacrificing equity.

In Canada, affirmative action of assisting disadvantaged groups and specialneeds populations goes hand-in-hand with measures that are akin tocompetitiveness- and finance-driven reforms. Equity is achieved through




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distance delivery of education to remote clientele, and greater autonomy toaboriginal education. In the same stroke, finance-driven reforms which tightencontrol over higher education, holding down school expenditures, andreconditioning the negotiation process for the public schools are equally

obvious (Lam, 1998). Canadian school reforms are not complete without theinclusion of competitiveness-driven reform features.

In Australia, ``commercial budgeting'' (governed by a target rate of return) istempered with the ``social budgeting'' (concession of access by those on lowincome). Vocational education and training (VET) represents a ``second chance''for the educationally disadvantaged, and their tuition has been deliberatelykept low (NBEET, 1995).

Origins of school reformsTo educators, the intermingling of different types of reforms suggests that theeffort is at worst a desperate, hodge-podge intervention, aims at removingdeep-seated problems over the past decades. And, at best, it is an unsystematicattempt to plot a new direction for the school system, which is in need of alarge-scale overhaul. However, when we assess the current reforms, somehaunting questions need to be answered. Do the current changes represent arandom selection of meddling strategies and policies? Or do they signifysystematic sets of procedures rooted in some coherent ideology? Given thatthere is a spontaneous push for comparable school changes under apparentlyvery dissimilar societal conditions, national or regional priorities and needs,political agendas, cultural and historical uniqueness, are the reforms thenprimarily the results of chance or some unannounced collaboration? Or can we

attribute these to some international conspiracy? Exploration of existingreform literature should shed light on the questions posed.First, current reforms are government-directed, based on overtly political

analysis (e.g. Lawton, 1994; Court, 1997). Educational policies appear to be lessconsensual and more a matter of conflict. In the USA, it was the Federalgovernment's document, `̀ A nation at risk'', that aroused Americans to dosomething about their schools (Negroni, 1992). In England, MargaretThatcher's determination to purge English culture of what she saw as itsmany weaknesses, and to restore `̀ Victorian values'' paved way for theEducation Reform Act of 1988 (Aldrich, 1994). In Canada, it was theConservative Government's `̀ prosperity initiatives'' that triggered the

`̀ Victorian Declaration'', unifying all Provincial Governments to undertakereform (Lam, 1998). In Australia, serious steps in reforms began in 1983 withthe election of Hawke's Labour Government. Insufficient federal grants,coupled with increasing functional responsibilities, reactivate the dormantstate governments.

Thus, in contrast to all the previous reforms, it was the political parties inpower, not the bureaucrats nor educators that engineered recent educationalchanges. But such an explanation falls short on why these respectivegovernments chose to act almost at the same time with similar agendas. One



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point of view (Reid, 1996) cited a combination of reasons for the suddenupsurge against the status quo in education. These include the risingunemployment or static or falling real incomes, declining public confidence ininstitutions of all kinds, a better educated and more demanding population,disillusionment with the results of the earlier reforms, and an aging and moreconservative population with increasing political pluralism.

While evidence supporting these reasons is not lacking, it is doubtful thatthese reasons alone propel concerned governments to act. One needs to notethat while the criticism of public education is more widespread, support fromparents remains high (Livingstone, 1995). Educators have good reason tobelieve that general confidence in the education system is far higher than thatplaced in other public institutions. If this observation is correct, changes in theeducational system should have received a lower priority than reform in otherpublic systems. And yet, this is not the case.

Some who are engaged in the study of government policies argue that aspecific issue only becomes central when there is a right combination of circumstances requiring the confluence of a policy or solution (e.g. Kingdon,1984). Others believe that the origins of reform may not be an outcome of confluence but can occur at more than one level (e.g. Mazzoni, 1993). Inevitably,a certain intellectual perspective or ideology that best captivates the spirit of the circumstances or forces will become the guiding principle of thegovernments for policy development and implementation. From thisperspective, some may subscribe to the idea that the reform is the offspring of the New Right or neo-conservative ideology. Encompassed in the neo-conservative view are three main beliefs:

(1) public institutions, including schools are failing to performsatisfactorily;

(2) the unfettered market is the preferable form for regulating allinstitutional activities;

(3) the role of government should be reduced.

Reference to the reform agendas shows while the first two beliefs seem to befirmly entrenched in the mindset of the parties in control, the reduction of governments' role in education is only partially true. We see, on the one hand,the transfer of managerial responsibility to the grass-root level (site-based

management). However, we also see the governments' incessant desire fortighter control in matters related to fiscal and resource management,curriculum content, staff and school performance appraisal, and the generalgoals and direction of the school. Thus, neo-conservatism contributes onlypartially to school reforms.

If there is a missing piece in the jigsaw puzzle, it is the emergence of thebusiness groups who shape the governments' initiatives (e.g. Mazzoni, 1991).Business leaders have chaired important commissions on education in both theUSA and Canada, even the exclusion of representatives of the educational




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community (Good, 1997). They have issued influential reports such asMinnesota Business Partnership or the Conference Board of Canada (Levin andYoung, 1997). In Britain, the reform legislation weakened the power of theproviders and increased that of the consumers. Employers and parents

emerged as winners, while educators and trade union members became losers.In Australia, the perspective of education outsiders also prevails. Dudley andVidovich (1995) and Burke (1997) all came to the same conclusion: that theeducation sector is under siege from philistine economists.

The economic rationalistic viewpoint, reinforced in part by the worseningsocial and financial conditions, and in part by neo-conservative ideology,provides a fuller picture as to how education reforms come about in developedcountries. That economic rationalism should be the steering force has much todo with the sweeping changes in the world economy. Martin (1995) asserts thatthe changes reflect the increased globalization of economic activities, growingcompetition among nations for markets and the widespread impact of theinformation and communications revolution. In this context, all economies haveto adjust to new structural realities, and the education sector, being critical tothe application of knowledge and information to production, is a focus of greatattention in most societies.

To put this in another way, under the structural transformation of the post-modern economic activities, coupled with intensified trade competition, thegovernments in the developed world underscore their political need to set the`̀ proper'' agendas so that reforms will be implemented as planned. Theprescription of deadlines is likely goaded by the apprehension that if reform isto follow its natural course of progression, there is no assurance that the

concerned countries can keep abreast with their counterparts in humanresource development.Given all these economic, structural and ideological pressure for change, and

the general concern for progresing at similar paces among the developednations, some mechanism is still needed for the governments of these countriesto engage in initial information exchange and to arrive at consensus of decisions and union of action. Such a mechanism has been found in an umbrellaorganization that all these concerned countries belong to ± the Organization forEconomic Cooperation and Devlopment (OECD). Indeed, throughout the pastdecades, the work of a subcommitte of the OECD, namely, the PublicManagement Committee and the Public Management Service (PUMA),

supplemented by publications from the Centre for Education Research andInnovation (CERI), helped shape a unified position for the developed countriesand syhchronize their reform strategies and efforts.

Framework depicting the relationship between economicrationalism and school reformsIn accepting that the school reforms are not random but deliberate, notaccidental but planned, not piecemeal but holistic, not region- or country-specific but universal, we must, by logic, recognize that reforms are grounded



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in some common economic framework. Central to this framework is the conceptof `èconomic rationalism'' that must therefore receive some clarification. Tomany educators, disillusioned by their government's abrupt change of coursein funding public education, economic rationalism represents `̀ a kind of

ideological gridlock in which economic instrumentalist imperatives are givenprecedence. . . The technical-rationalist emphasis on job skill development hastended to subordinate educational considerations which seek to develop highercognitive and critical capacities . . . to the margin of the main game (Burke,1997, p. 4).

In a more sophisticated analysis, however, the concept is not arbitrarily norheedlessly borrowed from some convenient economic principles. Rather, itrepresents a painstaking reflection and a complete overhaul of past remediesthat either bandaged superficial problems or tackled shortcomings piecemeal.In repudiating the unsuccessful experiments which poured resources into asystem with diminishing returns, the governments of the developed countriessearch fresh insights and models from the private corporations which makethese enterprises successful. Inevitably, a new set of criteria in reorganizingand resourcing public education emerged, with the ultimate purposes of making education more cost-efficient and outcome effective.

In the reconstruction of such a framework to make better sense of the currentsituation, a realignment with the political, economic, social and culturalconditions of the countries concerned is critical. A search for supportingevidence to testify a set of possible relationships in the concerned countriesseems to be in order.

It is envisioned that the guiding framework of educational reform

encompasses four layers. At the bottom is the source of ideology, whichprovides the basis for developing a set of principles. These principles governthe agendas of reforms. Through the set agendas, some common threads can bereadily identified.

Conceptual source and basic principlesConceptually, economic rationalism as the hegemonic cornerstone of educational changes aspires to guarantee the quality of human resources inpreparation for the new economic world order. Harbored in the economicrationalistic perspective is a set of principles, now becoming common termsadorning the reform literature. These include efficiency of operation, visible

evidence of increased productivity, and an unambiguous system of accountability (see Figure 1).

Understandably, the spirit of efficiency is never far away from the minds of those in the field of educational administration. Indeed, the ``cult of efficiency'',so strongly advocated by the proponents of the scientific management school of the 1930s, has been rekindled to satisfy a set of different national needs. In thecase of the USA, efficiency has been resorted to accomplish politicaltransformation (Negroni, 1992). In the case of Britain, the concern is to restorethe balance after the economic defeats at the hands of two of her former




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adversaries ± Germany and Japan (Aldrich, 1994). In the case of Canada andAustralia, efficiency becomes the salvation principle against ballooningnational and provincial/state indebtedness (Lam, 1998; Harrold, 1994).

The principle of productivity, on the other hand, is a relatively new concept.Educational reforms of the past decades were confined to the modification of educational inputs and processes rather than results. Throughout the past fivedecades, educational research had focused on the effectiveness of these twodimensions by comparing different instructional approaches, differentintervention strategies, different resource inputs, different structuralarrangements, all without definitive conclusions. The trouble is, most of theprocess quality and effectiveness are contingent on the nature of contextual

variables, which are difficult to control or even assess. The acceptance by mostgovernments in developed countries of the `̀ corporate management'' to thepublic sector marks a radical shift in the treatment of education from `à closedsystem, process-oriented, and role based approach to an open-systems,outcome-oriented and goal-based approach'' (Boyd, 1992). Central to theconcept of productivity is the need to reorganize educational programs andfinance to achieve `̀ cost-effectiveness'' (Odden and Clune, 1995). To thesescholars, low productivity stems from poor resource distribution,unimaginative use of money, insufficient professional development, a failure to

Figure 1.Conceptual frameworkfor current schoolreform



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focus on results and engage in practices such as reducing workloads andlowering class size that drive up costs.

The principle of accountability has roots in many areas of management,including economic theories about incentives and business concepts about

control. It also travelled a long and crooked path before it becomes entrenchedin the mentality of reformers. Starting as ``domesticated enterprises'' (Carlson,1975), having no need to justify its existence, the school under the reformmovement is challenged to be more `àccountable'' to the public. To some (e.g.Luhm et al ., 1998), accountability is explored in the context of studentachieving. To others (e.g. Kirst, 1990), accountability has a much broaderconnotation than outcome-based performance. Kirst identifies five otherapproaches of achieving accountability: through monitoring and compliancewith standards/regulations, through incentive systems, through reliance on themarket, through changing the locus of authority or control of schools andthrough changing professional roles. In formulating the typology, Kirststresses that the six categories should be combined in creative and effectiveways.

Given their diverse sources of origin and their separate paths of development, the three principles are highly interrelated with on another. Onecannot conceive efficiency without high productivity Neither would theirabsence be acceptable when accountability is being pursued. It is little wonder,then that when education reform literature is reviewed, it is quite frequent forthese terms to be used interchangeably.

Agendas of education reforms

Mechanisms for compliance. Arising from these three basic principles arespecific measures that add teeth to the governments' initiated school reforms.To put these measures in place, the concerned governments normally resortedto the creation of legislative acts, policies and/or directives to ensurecompliance from the educational communities.

In the USA, the parliamentary systems make it much more difficult for thegovernment to put together and implement a coherent set of policy proposals(Keedy and Freeman, 1997). North Carolina had four very different reformprograms between 1984 and 1991. South Carolina (Ginsberg, 1995) had three.Nonetheless, there is an unending series of reform proposals from politiciansseeking to put their personal stamps on education policies.

In England and Wales, formulation and enforcement of the centralgovernment's agenda were less complicated. The Thatcher-Major governmentspassed a series of laws, notably, the Education Acts of 1988 and 1993, whichbecame the main legal guidance for directing reforms.

In Canada, upon agreement among the provincial governments in terms of the general direction and thrusts of education reforms, each provincialgovernment tended to follow its own tradition and pace in implementingcomparable reform agendas. In Ontario, New Brunswick, for instance, thereform paces are swift, and breaks from the tradition are dramatic. In Alberta,




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Manitoba, Saskatchewan, and most the Maritime Provinces, the pace of reformis more gradual and continuous of the established policy patterns.

In Australia, influenced strongly by the general premises laid out in the keyreport, Quality of Education in Australia (Karmel, 1985), the Commonwealthgovernment and the state governments, in turn, utilized resource allocation tobring educational communities in line with the defined policies. Both passiveallocational mechanism (spending on chosen activities) and active allocationalmechanism (encouraging behaviors complying with policy goals) are employed(Harrold, 1996).

Reform agendas. Much literature exists from American sourcesdocumenting different kinds of education reforms. Cibulka (1990), perhapsmore so than others, has developed a taxonomy for summarizing types of reforms. Among the so-called ``core reform'' strategies he identified, many stategovernments have adopted centrally mandated higher standards, efforts

towards greater teacher professionalization, school empowerment, promotionof higher order thinking skills and dropout prevention programs. Among thosebeing labeled as `àncillary reforms'' are provision of performance incentive,deregulation, accountability, school-based community control, greateropportunity for parental choice and state takeovers.

In England and Wales, the reform agendas contain a curious mix of centralization and decentralization. On the one hand, there had been a massiveincrease in central control as the Secretary of State has been given 415 newpowers (Lawton, 1989). There is also the creation of a national curriculum and atesting program. On the other hand, schools are given the right to opt out of thecontrol of their local authority, forcing the latter to provide at least 85 percent of

the funding needs based on some centrally-defined formulae. School governingbodies consisting of parents and community representatives are empowered tolook after staffing and budgetary allocation for individual schools. Schools andlocal authorities are to publish test results of students so that parents canchoose schools for their children.

In the Canadian context, while individual provincial governments mighthave different traditions and priorities, there are sufficient common grounds inthe agendas to suspect that some general framework must have been agreedamong ministers of education prior to their proclaimed ``Victoria Declaration''.Chief among the agreements is a reduction of funding available for public

education with a corresponding demand for greater performance. Schoolperformance is measured largely in terms of student achievement, and thisnecessitates the identification of core curriculum and expansion of testingprograms (e.g. McEwen, 1995). To streamline administrative jurisdiction,school districts are reduced in number and schools are empowered to look afteroperational details. Parents and community members were approached toassume more important roles in the school governance structure. Parentalchoice and competition were considered to be a desirable foundation for theeducation policy.



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With respect to the situation in Australia, reforms have been focused onpolicies that deal with educational goals and outcomes, and the use of ministries to separate regulation, monitoring and funding functions. Emphasiswas also placed on decentralization and devolution, output accountability,

benchmarking, development of management information systems and theencouragement of institutions to be entrepreneurial and financially self- reliant.In the area of the curriculum, there is a reaffirmation of competency-basededucation, rationalizing learning around key areas and profiling (AustralianEducation Council, 1992). In many ways, curriculum changes represent a shifttoward outcome-based education.

Common reform features among the four countries. Close scrutiny of thereform agendas across the four countries reaffirms the fact that almost allfeatures that constitute the reform agendas are associated with efficiency,productivity and accountability, the three principles that sustain economicrationalism. For the Americans, efficiency is achieved through deregulation,performance incentive, and school empowerment. In England and Wales, asidefrom the same strategy of school empowerment, centralization of control andcurriculum are viewed as reliable mechanisms to attain the same objective asthe national government is dissatisfied with the results of past changes in thehands of professional educators and local education authorities. In Canada,efficiency is accomplished by a reduction of funding. This is accompanied by areduction of school districts in many provinces, by a general attempt atidentifying, core curriculum and again by school empowerment. Likewise, inAustralia, through allocation of resource correspondent to education outcomesand decentralization as well as devolution, it is expected that the school can be

run with efficiency.To bring about high productivity, the Americans depend heavily uponsetting higher standards for both students and staff. Raising students'performance and increasing professionalization of teachers are viewed asparallel mechanisms to increase productivity. For the British, the focus isplaced upon testing programs and assessment. The Canadians and theAustralians have resorted to the same strategy. However, the latter have goneone step further by openly encouraging an entrepreneurial, self-reliant spiritamong educational institutions to assure that corporate culture is transferred,which is traditionally dependent on public support.

When it comes to accountability, the release of market forces in the form of

competition and parental choice seems to be the preferred strategy among thefour countries. A fundamental conviction that sways the concerned authoritiesis that unless the school system is accountable to the students served and theirparents, who can exercise the option rights on behalf of their children, there isno assurance that the system can improve or retain the momentum to improve.A second general approach to enhance accountability is to empower school-based community control so that educators should learn to accommodate theexpectation of their constituencies. In Australia, there is the additional ``bench-marking'' system to strengthen output accountability.




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ConclusionIn contrast to all previous educational changes, the current school reforms, for

better or for worse, are outgrowth of the changing economic activities that have

transformed economic, social and, to some extent, political orders of the world.

The education sector, being the critical area for preparing national human

resources, has received top consideration by the concerned authorities in the

USA, UK, Canada and Australia. In reengineering education, principles of

economic rationalism (efficiency, productivity, accountability, expectant), play

key roles in tailoring how reforms should be undertaken. Government actions,

legislative acts and directives are all geared towards the realignment of

educational changes along the economic framework.

Through the current emphasis on greater social rate of return, performance

improvement, outcome-based assessment, market force of choice and greater

public involvement, economic rationalism has shepherded educational reforms

into a new path, which has never been traveled before. Once forged in such aspirit, institutionalized in structure and process, and synchronized with the

global business trend, it is quite unlikely that the pendulum of change will

swing back to the original situation as befell all foregoing reforms. Educators

must reorient themselves to the new movement but keep their professional

judgment, knowledge and technical know-how for the betterment of their

students and schools, rather than fighting a losing battle of trying to hold on to

their past sacred traditions. It is indeed more critical than before for them to

harmonize their professional expertise with the prevailing economic

rationalism so that they will not be swept away by the surge of the torrent in an

increasingly turbulent environment.

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Documents

Economic Rationalism 1