Private Schooling Promotes Political and Economic Freedom? An International Fixed Effects Instrumental Variables Analysis

Abstract

Additional private schooling within a nation-state may increase citizens’ political and economic freedom through increased educational quality, balanced power relationships, and increased civic engagement.We employ a two-stage-least-squares time and country-level fixed-effects analytical technique to examine how private schooling could affect political rights, civil liberties and economic freedom indices. We also use a new instrumental variable, short-run fluctuations in the demand for schooling, to predict private schooling. We examine 174 different nations across the globe from 1999 to 2014, and find significant evidence to suggest that private schooling leads to enhanced political and economic freedom. In particular, our preferred model finds that a ten percentage point increase in private share of schooling enrollment within a nation, over time, is associated with a 7.4% of a standard deviation increase in the Political Rights Index and an 8% of a standard deviation increase in the Economic Freedom of the World Index.