Public Subsidies for Private and Public Education: The Dutch Case

Abstract

The possibility of “privatizing” education and other quasi-public services has been widely discussed in the United States today, and in other chapters of this volume. Policies such as a voucher or tax credit system, which would give public subsidies to private schools, are examples of privatization proposals. Many people feel that such policies would bring variety, choice, consumer responsiveness, and greater efficiency to our schools. Others fear that they would increase social segmentation, damage the public schools, and enable wealthy people to receive a better education for their children privately, but (partially) at the public expense. To expore these issues, this chapter examines the experience of the Netherlands, a country which, in effect, has had a voucher system in education for many years. In Holland, education and most health and social services are financed by the government but delivered by private nonprofit organizations, often religious in nature. As shall become evident below, the Dutch educational system avoids many of the possible pitfalls of privatization. This is due partially to particular mechanisms the Dutch have adopted to avoid these problems, which could conceivably be replicated here, and partially to broader structural features of the Dutch educational system and its role within society, which could not readily be replicated. The chapter proceeds as follows: The first section summarizes the historical background of the public-private division of responsibility for education in the Netherlands. The policy of privatization is seen as a response to diverse tastes about education, stemming from basic cultural (religious) differences, in a political setting where no one group was in a position to impose its preferred product variety on the others. This is consistent with a hypothesis I am testing in a multicountry study: that degree of reliance on private provision of quasi-public goods is positively related to cultural (particularly religious and linguistic) heterogeneity in democratic societies. It also is relevant to the discussions, found in several previous chapters, of why families choose private schooling.