Efficiency, social justice and educational voucher in Singapore

Economics of Education Policy
Autumn Term 2004-2005

Course Assignment

Weijie NG
MA Economics of Education


Part 1:
Critically assess the meaning of the concepts of efficiency and social justice and how they are applied in the analysis of education policy.

Part 2A:
Design a voucher or quasi-voucher for improving parental choice of school, ensuring that the money follows the pupil.

The voucher … should have specified efficiency and social justice objectives.

For … A … outline a research design for evaluating the success of the proposed scheme in achieving its objectives after it has been in operation for five years.

Guidelines for Part 2:
1) Outline your design, making clear what the scheme is and explaining what you intend to achieve by introducing this scheme. Evaluate your proposed scheme against the criteria of efficiency and social justice. For this evaluation, you should use economic theory and empirical evidence, drawing on Part 1 for evaluating your scheme in relation to efficiency and social justice.

2) Briefly outline a research design for a study that would evaluate the impact of your quasi voucher … scheme after it had been in operation for 5 years. Note that your research design outline will be assessed in relation to how well it is likely to produce valid evidence of the impact of the scheme.

The total word limit is 5000 words (excluding references) and must not exceed this by more than 10%. Please write the word length at the top of your assignment.


Part 1

Lord Lionel Robbins, in his influential An Essay on the Nature and Significance of Economic Science, proposed a definition of Economics which is all encompassing and is still used to define the subject today - “Economics is the science which studies human behaviour as a relationship between ends and scarce means which have alternative uses.” He also asserted that ‘what men and women are depends partly upon what they bring into the world and partly on what has been added to it by education and experience’ and suggested that it is appropriate and deserving for economics to be concerned with the latter (Robbins, 1968). In the first of this two-part essay, therefore, two concepts at the core of economics – efficiency and social justice, as well as some applications within education policy, will be described and critically examined.

According to Lockheed & Hanushek (1994), the rationale behind efficiency concepts in economics is straightforward. Efficiency refers to a relationship between inputs and outputs, and is achieved by either a) maximising the value of outputs given the value of inputs or b) minimising the value of inputs given the value of output. When a situation is said to be inefficient, this means that the desired means could be attained with less inputs, or that the means utilised should be able to produce more of the desired ends. Generally, when there is more than one input and / or output, inputs and outputs are measured (or estimated) in monetary units because they can seldom be expressed in other terms meaningful for comparison. In education, examples of inputs, when broken down into factors of production (Lipsey 1989) would include:

Labour: Teachers
Capital: Computers

Outputs from the educational process are myriad and may be accruable to the individual student or spill over as externalities to others. Among benefits captured by students directly are a) direct financial returns, in the form of an increased stream of income flows, b) the financial option return, which refers to the option of acquiring additional and more financially enticing education, c) the hedging option, which involves an enhanced capability to manage change and d) non-market returns involving non-monetary benefits with subjective value, e.g. the intellectual appreciation of Homer’s Illiad (Weisbrod 1964).

External benefits may also be identified, and related to residence, employment and general society (Weisbrod 1964). Residence related benefits refer to those that accrue to the family (current and future), the neighbourhood, and to taxpayers, e.g. the childcare by-product of schooling. For example, the provision of schooling for school age children may be viewed as a form of day care, which frees parents to participate in the labour market. Employment related benefits are those in which the education of one worker results in the general improvement in other workers’ productivity. Benefits to society in general may be viewed as a residual category, as Weisbrod (1964) defines these to be benefits that ‘are distributed broadly either spatially or temporally, so that the nature of individual beneficiaries is obscure.’

Lockheed & Hanushek (1994) further distinguished between internal efficiency[1] and external efficiency. The former is concerned with maximising educational outputs given a set of educational inputs (or a budget constraint) and addresses the allocation of funds within the educational industry. This means that the sector is producing at the production possibility frontier. Internal efficiency may be improved by either reallocating resources to inputs that have larger positive effects on outputs from inputs that have smaller effects, or by reducing overall inputs while maintaining the existing level of outputs. The latter, external efficiency, requires an examination of the usefulness of funding to the education sector, comparing with public or private alternative uses. Should England spend a marginal one billion pounds from taxpayers on the education system or on the health sector? This examination would provide a guide in determining the optimal level of educational funding for a country, and could be useful in allocating appropriately across sub sectors such as higher education and workforce training.

Lockheed & Hanushek (1994) may be right in asserting that the reasoning behind efficiency concepts is straightforward, but the operationalisation of such concepts is hardly simple. How does one measure efficiency? Education has multiple inputs and outcomes, some of which are difficult to measure, or even identify. Calculations of returns to education are frequently used to investigate whether it would be efficient for one to undertake a marginal year of education, or an additional qualification. Such calculations tend to ignore some benefits of education, either because they cannot be measured, e.g. enhancements in social cohesion, or because they cannot be easily monetised, e.g. improvements in health or declines in petty crime rates. Critics may object that economists’ seemingly exclusive use of monetary valuations makes for an extremely narrow definition of efficiency. However, some measure of value has to be used for interpersonal comparison of utility, and monetary value has been argued to provide economists with a reasonably good common denominator (Heyne 2000).

Barr’s (2004) and Weisbrod’s (1969) conceptions of horizontal and vertical efficiency with respect to the targeting of benefits may also be useful in analysing applications of educational policy. The former is concerned with minimising gaps: if additional resources are to be allocated to children from the lowest socio-economic class on the basis on need, then all children in this grouping should be able to access these extra benefits. The latter is concerned with avoiding leakages. This means that only children belonging to the lowest socio-economic class should be able to access the additional resources.

The second core concept in economics to be discussed is that of social justice, which is a term often used interchangeably with equity. However, ‘justice’ seems to have acquired a broader meaning and has been used in an all-encompassing manner. Rawls (1972) described not only his own two basic principles, but also utilitarian principles as ‘theories of justice’. Political philosopher Pettit (1980) even added libertarian principles in his review of justice.

In a recent economic literature review, Konow (2003) proposed an integrated justice theory, a catch-all theory that with its Need, Equity and Efficiency principles, seems to include everything from egalitarianism to utilitarianism, from Marxism to desert theory, and everyone from Pareto to Kahneman and Nozick to Marx.

The Need principle is with reference to basic needs, and deems an allocation socially just if basic needs are provided for equally across individuals. In education, for instance, an allocation that allows for a socially and politically determined minimum level of literacy and skill sets across all individuals may be considered just according to this first principle. Included under this broad Need principle are ideas of egalitarianism and Marxism, as well as Rawls’ Liberty and Difference Principles.

The Equity principle, that an allocation is fair if individuals’ outcomes are proportionate only to inputs that they control, stems from Aristotle’s distributive justice theory and Locke’s desert theory (Konow 2003). Distributive justice is the doctrine that a decision is socially just if all parties receive what they need or deserve. It is often contrasted with procedural justice. The former concentrates on just outcomes, while the latter concentrates on just processes. Desert theories essentially identify factors that might be considered fair to use in the determination of economic distribution. For example, Buchanan (1986) distinguishes between luck, choice, effort and birth. He considered the distribution of economic outcomes according to effort as the least controversial and believed that conflicts with common notions of justice would only come about with inequalities that are caused by serendipities of birth. Therefore, for Buchanan, it would be socially just if educational outcomes were such that those consumers of education (i.e. pupils) who put in the most effort would derive more benefits, and it would be grossly unjust if certain consumers derive more benefits from the educational process merely as a consequence of social class, gender or colour. Linked to Buchanan’s desert theory are Musgrave’s (1959) concepts of horizontal and vertical equity. Horizontal equity refers to the equal treatment of equals, i.e. if individuals A and B are socially deemed to be identical in pertinent and essential characteristics, they should have the same access to the same educational opportunities, to attain the same educational outcomes. Vertical equity is the unequal treatment of unequals. Therefore, if individual A puts in less effort in his education (and gets lower GCSE grades for example), it is perhaps vertically equitable for A to receive a smaller financial option return (among other benefits captured by students directly) and have a relatively restricted access to higher education. Also, it might be considered socially just if children with special educational needs (SEN) receive more funding. Inequality, therefore, might be equitable.

Konow’s third principle, Efficiency, largely involves the concept of efficiency as laid out above in this essay. People are homo economicus, seeking to maximising surplus, or output over inputs, and this goal, that of achieving the greatest good for society, is deemed to be a form of fairness. In this sense, efficiency is in itself a component of justice, and not necessarily at odds with social justice as a whole. Therefore, an educational system which distributes an inordinately large proportion of the available inputs and outputs to the ‘gifted’ might be considered to be socially just if this option perhaps leads to the largest increase in the Gross Domestic Product of the country.

In including efficiency as a major social justice goal, at first glance, if social justice and equity are taken to be synonymous, the equity-efficiency tradeoff, as elucidated by economists including Okun in his 1975 eponymous Equality and Efficiency: The Big Trade Off seems to be eliminated. The trade-off still exists, however, within the integrated system of Konow’s justice theory, since the three principles are in a sense substitutes for one another and are ‘interpreted, weighted and applied in a manner that depends on the context’ (Konow 2003).

The equity-efficiency trade-off may refer to a trade-off of values. The ideas behind the values trade-off were first elucidated by Barry (1965), who proposed that the objective of efficiency might be traded off with the objective of equity, and argued that it would be rational for individuals or society as a whole to be indifferent between an allocation of resources that was immensely inequitable, but massively efficient, and another allocation that was highly inefficient, but extremely equitable. This tradeoff may be expressed using Le Grand’s (1991) ‘objective possibility frontier’ diagram. On the X-axis is the objective of efficiency, while on the Y-axis is the objective of equity. Le Grand stated that ‘an allocation of resources is efficient if it is impossible to move towards the attainment of one social objective without moving away from another objective.’ With respect to diagram 1, all points on the objective possibility frontier are objectively efficient, points outside are unattainable, and points inside are objectively inefficient. Both allocations A and B are objectively efficient, and they are substitutes for each other. Likewise, society might be indifferent between formulating a system of educational policies that has efficiency aims at its core and another that focuses on equity goals. It should be noted that it is entirely possible that both systems may turn up to be identical, if for example, the educational sector develops such that everyone attains a similarly high level of educational outcomes and the total output proves to be of a higher total value than for any other allocation, given the same set of resources.

Thus far, in part one of this essay, an attempt has been made to describe and critically examine the concepts of efficiency and social justice, with their myriad meanings, in economic literature, with especial reference to educational policy. Even though efficiency may recently have been increasingly viewed as a subset of social justice, the age-old problem of the efficiency-equity trade-off will continue to plague economists. In part two, these concepts will be utilised in the formulation of a school voucher scheme and the two opposing social objectives of efficiency and equity may have to be weighed against each other in search of a balance.

Part 2

Part 1 of this essay involved a critical examination, with applications in educational policy, of the economic concepts of efficiency and social justice. This part of the essay would revolve around the design and evaluation of a quasi-voucher scheme, which we shall refer to as the ‘Singapore International Pre-University Scholarship’ (SIPS), and include sections: A) a discussion of the case for the implementation of school voucher schemes in general, B) details with regards to the rationale and features of SIPS, C) an armchair evaluation of the likely economic impacts of SIPS with reference to the efficiency and social justice concepts as elucidated in Part 1, as well as D) a research design for a empirical study to evaluate the impact of SIPS after it has been in operation for five years.

Section A

The idea that the introduction of vouchers, which are tax funded certificates by which parents are given the ability to pay for the schooling of their children at an educational institution of their choice, would improve educational outcomes was perhaps first suggested by Friedman (1955) and further articulated in Capitalism and Freedom in 1962. Since then, the concept of the voucher has been developed by and appealed to both conservatives and liberals, for reasons of efficiency, equity, choice and social justice (Levin, 2001), depending on the individual voucher scheme’s design. Designs may differ according to geographical coverage, scope of regulations, monetary value, etc.

It may be best to use two examples of theoretical voucher proposals to show how their designs might influence their impact. Friedman’s (1962) proposal allowed for unconstrained choice by both parents and schools. This means that parents could choose to ‘spend’ their voucher at any school, and that schools were free to choose their intake and organisation. Parental topping up of the vouchers when they do not fully cover school fees was also permitted. The value of each voucher was also fixed at either the average cost of schooling, or a proportion of this average cost. Jenck’s (1970) proposal was liberal and much more concerned with equity. When demand for places in a particular school exceeded the supply, at least half the seats must be allocated via ballot. This would reduce the likelihood of ‘cream-skimming’ of middle class students and discrimination against working class in school selection processes (West et. al, 2004). Topping up would not be permitted, and the value of Jenck’s vouchers would not be fixed at a single level, but would be dependent on income. Lower income families would receive larger vouchers, such that schools with more financially disadvantaged children will receive extra resources. This might be viewed as vertically equitable.

Vouchers now no longer just exist in theory, but have also been carried out in practice. In the UK, the ‘Assisted Places Scheme’ was implemented in 1981, and targeted selectively at able but poor students (West, 1996). The present school funding system in the UK, which allocates financial resources to schools based on enrolment and pertinent indicators of disadvantage, such as the number of pupils with ‘additional educational needs’ (BBC, 2004), is in effect a quasi-voucher scheme too. In the US, where vouchers were first popularised, experiments have been carried out and evaluated, such as in Milwaukee (Witte, 1998). Vouchers have not been limited to Anglo-Saxon countries, and may be found in nurseries in Spain (Granell, 2002) and schools in Chile and Columbia too (Carnoy & McEwan, 2001).


Section B

Presently, under the Association of South East Asian Nations (ASEAN) scholarship scheme, up to fifty applicants from each of the other countries in this multinational organisation are granted a full scholarship as well as allowances for living costs, return flights, etc, to study in a top government funded school in Singapore (MOE, 2004). The Singapore International Pre-University Scholarship will be an extension and a reconstitution of the existing ASEAN scholarships, and will commence in the academic year 200X. Since money is assigned to students, but sent directly to schools, SIPS will in essence be, just like Chubb & Moe’s (1990) scholarship plan, a quasi-voucher programme.

The case for SIPS is five-fold: i) to enhance educational opportunities and choice for bright young people from developing countries, ii) to boost internal efficiency by infusing foreign competition and positive peer group effects into local schools, iii) to boost the pool of talented labour supply available, iv) to promote equity by giving capable young people from poorer developing countries the benefits of a good quality education, and v) to generate social cohesion and goodwill with other developing nations, especially the rapidly growing India and China.

The features of the quasi-voucher system will be designed in line with the objectives above.

· SIPS will not be available to ASEAN nationals who will continue to qualify for the ASEAN scholarships. Instead, SIPS will target Sri Lanka, India, China, East Timor, Bangladesh and Pakistan. With the permission of these countries’ ministries of education, the Singapore government will directly advertise and promote SIPS in schools. Applicants would apply directly by mail or online to the local Singapore consulate and short-listed individuals would have to pass a benchmarked selection test and interview to ensure academic aptitude, especially proficiency in the English language, the language of instruction in Singapore schools. The target take-up rate per annum would be 500 (approximately one percent of the average Singapore schools year group size). Successful applicants will undergo the last four years in the pre-university education system and randomly placed in Singapore government funded schools. School fees and other school charges, including accommodation in student hostels will be fully waived. However, SIPs would not cover other living costs.

· Schools will not compete for these international students. Instead, Singapore’s schools will be randomly selected to host students who are also randomly allocated. The competition to be infused into the Singapore education system is not on a school level, but on a pupil level. Singaporean and international students will compete for scarce educational rewards and honour, e.g. places in prestigious extra-curricular programmes such as the Science Research Programme[2], pupil rankings within each school, tertiary education places, etc. In so doing, using Chua’s (2005) words, ‘foreign bright sparks (will) help kids here shine’.

· The annual value of the voucher would be 8,000 Singapore dollars in secondary school, and 13,000 Singapore dollars in junior college. These sums are approximately fifty percent higher than the annual recurrent expenditure[3], to take into account additional resources that schools may need to employ, such as in English language courses, etc. The voucher would be pegged to the retail price index to maintain its real value.

· Upon completion of pre-university schooling, there are no restrictions or bonds placed on the international students. They will be free to apply for Singapore universities, return to their home countries, use their Singapore-Cambridge GCE ‘A’ Level qualifications as a stepping stone in their applications for Australian, British, etc, tertiary institutions.


Section C

Having briefly introduced the concept of vouchers as well as the idea behind and features of SIPS, this Section will deal with the likely impacts of the proposed voucher system on Singapore: whether the stated aims are likely to be fulfilled and how efficiency and social justice elements as described in Part 1 are influenced.

The first aim of SIPS is to increase choice of educational schooling for bright young students from developing countries. Given that Singapore has a good reputation for schooling, with good results in international academic benchmark tests such as the Trends in Mathematics and Sciences Study 2003[4] (Gonzales et al., 2004), and that there is high and growing demand for education from countries such as India and China (Lim, 2003), it is very probable that the target of 500 voucher recipients would be easily reached. This would mean that SIPS is welcomed by the target recipients and that its financial aid allows for their preferences for Singaporean schooling to be met. In this sense, both the first and the fourth aims of SIPS may be simultaneously achieved.

However, other equity issues abound. For example, given the English language aptitude criterion and no explicit income criterion, one might expect that a likely correlation between wealth and proficiency in English would mean that poorer applicants would be at a relative disadvantage. The English language criterion should be deemed necessary to facilitate effective learning and to promote an efficient education. In this conflict between efficiency and equity, equity is traded away for efficiency. Furthermore, any perceived penalising of the richer to advantage the poorer goes against the grain of a society and educational system formally based on meritocracy[5] (MOE, 2004).

Whether competitive forces can or have improved efficiency in education has been extensively debated, but a broad survey of the literature seems to indicate that there are efficiency gains. For example, open enrolment has been associated with improvements in pupil attainment in the US (Clewell and Joy, 1990). Also, in England, the percentage of pupils with good GCSE grades has been increasing substantially since the introduction of market based reforms through the 1988 Education Reform Act (Bradley & Taylor, 2000). However, one should be mindful that correlation does not indicate causation, and the efficiency gains in England, as expressed in examination grades, might well be imaginary, since the replacement of the GCE and the CSE with an arguably easier, coursework based GCSE in 1986, and the abolishment of norm-referencing in 1987 (Gorard & Taylor, 2001) render grade inflation as a more plausible reason than the introduction of quasi-vouchers. Studies (Feinstein & Symons, 1999; Robertson & Symons, 2003) have found a strong causative link between peer groups and educational attainment as well. This suggests that the probability that the introduction of good foreign pupils, which may be represented as an injection of a peer group, will improve educational outcomes is very high. Therefore, aim two, that of improving internal efficiency in Singapore schools may be expected to be achieved too.

The impact on external efficiency and Barr’s (2004) vertical efficiency might well be different. Concerns about crowding out, i.e. that the Singaporean quasi-voucher displaces private expenditure on the part of international students, suggest that some of the financial resources expended on SIPS might be more efficiently used if channelled to alternative uses within the educational system or the wider economy. Vertical efficiency may be deemed to be conceded when SIPS quasi-vouchers leak to richer rather than poorer international students. To take income into account for these reasons during the selection process would compromise Singapore’s meritocratic principles. However, it is probable that the random allocation of recipients to schools would deter more well-off parents because they are perhaps risk averse and their ‘class strategies’ (Ball, 2003) to maximise educational outcomes for their children would probably be to pay for a guaranteed place in a top ranked school. As such, both external efficiency and vertical efficiency may not be seriously threatened.

Some voucher recipients may return to their home countries upon graduation, or go on to other countries for further studies. Those who stay, however, would add on to the pool of talented labour supply in Singapore, thereby fulfilling the third aim of SIPS.

Given that policy is multidimensional, that education policies interact with other policies in other fields and that policy implementation is never straightforward, policies like SIPS may well be expected to have intended as well as unintended results (Taylor et al, 1997). For example, the ideas and objectives behind favourable treatment of international talent may be sound, but the implementation may be such that these objectives themselves are not achieved and that pernicious effects abound (Young PAP), 2005).

For instance, the government has long been treating foreign students favourably by doling out generous scholarship packages and among some Singaporeans, this has been an issue of discontent, which has been acknowledged by the government (Young PAP, 2004). There are fears that foreigners are crowding out scarce places in tertiary education and the job market. Some are also concerned that international students are keeping to themselves socially, in which case mutual goodwill and social cohesion between Singaporeans and these foreigners might not be fostered. There are myriad reasons for this, and culture differences such as the prevalence of a localised English language, ‘Singlish’ infused with Chinese, Malay and Indian words and grammar (Rubdy, 2001), might play a part (Hoon, 2003). More grating to disgruntled members of the public though, is the existence of a few foreign students who ‘actually think that Singaporeans are generally stupid and that the foreigners are so badly needed that it is all right to display their attitudes and voice their displeasure with little gratitude to Singapore’ (Young PAP, 2005). Singapore to these foreigners is just a place to get the necessary qualifications as a stepping stone for freer and greener pastures in the United States, Europe and elsewhere.

In the implementation of SIPS, public relations with recipient countries should also be managed well, to avert feelings and accusations that Singapore is poaching scarce high ability individuals and depriving them of a skilled workforce, much as many developing countries have charged Britain of unfairly taking their teachers, doctors and nurses (Hall, 2004). Otherwise, the goodwill and regional cohesion as desired in the fifth aim of SIPS would not be realised.


Section D

Section D will endeavour to design an economics-based empirical study to test primarily for desired potential outcomes, as outlined in Section B and C. The following issues will also be discussed: the choice of randomised experimental design over a non-randomised quasi-experiment design, as well as the case for a sociological review to augment the economics study.

Choosing between an experimental design and a quasi-experimental design is hardly uncontroversial. Each has its advantages and its disadvantages, and it is only after some deliberation that one is selected over the other. Key in this selection is the issue of causality. Establishing causal relationships is at the core of explanatory research design and it is not easy to establish that one event causes another mainly because it is difficult to observe an event actually causing change in another (Hage and Meeker, 1988). Correlation between two events is insufficient, and any assertion that correlation reflects a causal relationship must make sense at three levels: the time order, the capability of the dependent variable to change and the theoretical plausibility (de Vaus, 2001).

Randomisation, according to Baker (2000), generally makes experimental designs more robust. Given large enough sample sizes, the random assignment of the experimental intervention amongst eligible subjects creates comparable treatment and controls that are statistically equivalent to each other. Therefore, control groups, thus generated, serve as ‘perfect counterfactuals’ (Baker, 2000) and will be free of the selection bias problem permeating most evaluations. With these ‘perfect counterfactuals’, interpreting results becomes simple, since the impact of the intervention on outcomes can be measured directly by the difference between the means of the treatment and the control groups. However, despite the theoretical appeal of experimental designs, there are in practice a number of problems. Primary among them is the question of ethics. Randomisation may rightly be considered unethical when it denies otherwise eligible members of the population simply for the sake of academics’ ‘scientific credibility’. A hypothetical extreme example might be the denial of primary education in a Third World country, which could be a serious handicap to basic literacy, health and economic capabilities, perhaps in order to evaluate the returns of primary schooling. Other problems include the political difficulty in trying to provide the experimental intervention to some but not others, especially when it is deemed to be unfair as well as the administrative problem of ensuring randomization in practice. (Doolittle et al, 2001)

Quasi-experimental designs generate comparison groups that, at least in observed characteristics, resemble the treatment groups, by employing econometric tools such as instrumental variables (Baker, 2000). The core benefit of such designs is that they only need to draw upon existing data (after the programme undergoing research has been implemented), and are therefore usually quicker and cheaper to carry out. However, since the method is less robust statistically, the results derived from natural experiments are often less reliable. The econometric tools necessary to generate unbiased comparison groups also require hideously complicated statistics and mathematics, with no guarantee that the bias can be fully removed.

Upon weighing the pros and cons, an experimental design is chosen, for its statistical reliability and relative simplicity, over the quasi-experimental approach. Table 1 below outlines the study of efficiency.

SIPS: Experimental Design To Evaluate Efficiency
Table 1 here

The experimental design would be used to determine whether internal efficiency has been improved with the introduction of SIPS. As expressed in Part 1, while efficiency concepts may be straightforward, operationalising them in education is not, primarily since inputs and outputs are typically difficult to measure or even identify. In this study, national examination results will be used as a proxy for educational outputs, but the limits of such an indicator such as that it arguably only measures narrowly defined academic outcomes, or that testing can be methodologically flawed (Mayo, 1959) must be acknowledged. Moreover, a proper measurement of efficiency should involve not just the outputs and benefits of education in isolation, but also the inputs and costs (Levin & McEwan, 2001). Therefore, the results of the study can only serve as a guide. Furthermore, the sample size is relatively small, but simple regression analysis could be brought in to further ensure that schools that are randomly chosen do not by chance share particular characteristics, such as being single-sex, which could bias the results.

The take-up rate of available places each year may serve as an, albeit admittedly crude, indicator, for the success or failure of SIPS to achieve its choice, labour supply and equity aims. They may be deemed to have been realised if all 500 places available are fully taken up each year. Revealed preference theory (Samuelson, 1938) might then suggest that education in Singapore is a desired opportunity and choice for bright young foreign talent, who might otherwise not be willing or able to afford it. 500 voucher recipients each year implies an annual potential increase of 500 per annum to Singapore’s labour supply. That financial benefits are going to recipients from poorer developing countries and who deserve it may be viewed as inherently equitable and socially just.

Studying the impact of SIPS from only a macro-scale economics perspective and using only experimental designs and fancy econometrics may not give a full picture. There is, perhaps rightly, a case for micro level sociological, ethnographic work, which rely primarily on exhaustive examination of individual cases. The core benefit of case studies is that contextual information is mined, which allows for greater understanding of causal processes (de Vaus, 2001). Studies, such as those by Gillborn and Youdell (2001), showing the emergence of what they call an ‘educational triage’[6] that compromises equity in order to boost ‘efficiency’, from the market based reforms of the 1988 Education Reform Act, also exposes phenomena and behaviour which are not easily captured at a macro level or by just looking at aggregated data. Furthermore, sociologists are arguably better placed than economists to study the impact on public goodwill and social cohesion, i.e. to determine whether the fifth aim, the target of enhancing relations with other developing countries has been reached, perhaps through the use of interviews and surveys to ascertain the attitudes that the recipients of SIPS and their parents develop towards Singapore and Singaporeans.

Upon conclusion of this study, policy-makers may use the results as an indicative tool to deliberate upon the future of the SIPS programme: whether it should be extended or contracted, how the features may be modified, etc, in order to further its existing and additional aims. Similar studies should be carried out on a regular basis to ensure the continued relevance of SIPS. Such future studies should attempt to refine and extend indicators of efficiency, equity and other impacts, desired and undesired, expected and otherwise, of SIPS.


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Appendix 1: Singapore Education System: Stylised Facts and Figures

Singapore:
The total population of Singapore is 4.2 million, of which 3.5 million are Singapore residents (citizens or permanent residents).
Land area is 700 square kilometres, and population density is 6000 per square km.
The four major racial groups in Singapore are Chinese, Malay, Indian and Others: 76 percent of Singapore residents are Chinese; 14 percent are Malay; 8 percent are Indian; 2 percent are Others.
The official languages in Singapore are: English, Mandarin, Tamil and Malay. The language of instruction in schools is English. For historical and regional political reasons, the national language is Malay.
The five major religions in Singapore, in descending order are: Buddhism, Christianity, Taoism, Islam and Hinduism.
Approximately 85 percent of Singapore residents stay in government built Housing Development Board (HDB) flats.
The median and mode of household income is in the 3000 and 3999 Singapore dollars per month bracket. (1000 to 1330 British pounds)
Gross Domestic Product (GDP) in 2002 was 112.4 billion US Dollars at purchasing power parity.
GDP in 2002 was 27,000 US Dollars at purchasing power parity. (In comparison, Britain’s GDP in 2002 was 26,500 US Dollars at purchasing power parity.)
Government consumption in 2002 was 11.9 percent of GDP. (In comparison, Britain’s was 20.1 percent.)

Structural Aspects of Schools:

Typically, Singaporean students go for 6 years of primary school, 4 years of secondary school and then, 2 years of junior college.
Approximately 50,000 students enter primary schools every year.
Approximately 50,000 students enter secondary schools every year.
Approximately 12,000 students go on from secondary schools to junior colleges every year.
In 2003, there were 162 secondary schools and 16 junior colleges.
A child in Singapore undergoes at least 10 years of education, of which 6 are compulsory and spent in primary school, and the other 4 is spent in secondary school.
Students take the Cambridge-Singapore GCE ‘O’ Levels at the end of secondary school, and the ‘A’ Levels at the end of junior college.
The school year starts on the 2nd of January, and consists of 4 terms of 10 weeks each.
Ability based streaming takes place at the ages of 9 (selection for the Gifted Education Stream), 10 (into three different language streams), and 12 (at the Primary School Leaving Examination (PSLE) for separation into the Special, Express and Normal streams).
Subject based streaming takes place at the ages of 14 and 16, for the Science and the Arts streams.
Students apply for secondary schools and junior colleges through a centralised administrative applications process, and allocation is based almost entirely on the PSLE and ‘O’ Level results at the end of primary school and secondary school respectively: the higher one’s scores, the more likely one is to get into the school of one’s choice.
Most students in secondary schools go to the Express stream.
There are four types of schools: Government, Government-Aided, Autonomous and Independent, in increasing levels of autonomy with respect to school administration, curriculum, staff deployment and fee setting.
In 2003, 65 percent of secondary school students went to Government schools.
In 2003, 13 percent of secondary school students went to Government Aided schools
In 2003, 16 percent of secondary school students went to Autonomous schools.
In 2003, 6 percent of secondary school students went to Independent schools.
In 2002, the racial composition of those eligible to enter secondary school was: Malay (18 percent), Chinese (73 percent), Indian (8 percent) and Others (1 percent).
New educational programmes are being instituted in Singapore, at both top schools and new specialist schools, e.g. the Singapore Sports School (opened Jan 2004) and the National University of Singapore High School of Mathematics and Science (modelled on the New York Bronx High School and opened Jan 2005). However, these programmes tend to be only accessible to the top students in each cohort.
League tables exist, and from 2004, the new School Achievement Tables not only bands schools together based on academic achievement (instead of exact academic scores), but also highlights value-addedness in academic outcomes, as well as non-academic domains, such as physical health and staff well-being.
To allow for informed choice on the part of parents and students, the following will be made publicly available: revised league tables (as above), web-based interactive system to generate school lists based on parameters chosen by parents / prospective students, school websites, honour rolls of school achievements, etc.
Top schools are encouraged by the Ministry of Education to attract academic high achievers from neighbouring countries in ASEAN, as well as from India and China, so that ties of friendship may be built, leading to ‘mutually beneficial networks’ (Mathi, 1996).

Finance:

The annual budget of Ministry of Education is about 6 billion Singapore dollars (2 billion British pounds), which represents about 4 percent of GDP.
In 2003, annual expenditure per student in secondary school was about 6500 Singapore dollars (2200 British pounds), while annual expenditure per student in junior college was about 11200 dollars (3700 pounds).
In 2003, annual recurrent expenditure per student in secondary school was about 5200 Singapore dollars (1700 British pounds), while annual recurrent expenditure per student in junior college was about 8500 Singapore dollars (2800 pounds).
Students at primary level do not pay school fees, but have to pay small sums of ‘miscellaneous’ fees to cover equipment and special programmes beneficial for students.
Students at secondary level and junior college pay heavily subsidised schools fees, as well as ‘miscellaneous’ fees.
All schools, whether Government, Government-Aided, Autonomous or Independent, are largely tax funded by the state.

Figure 1: Overview of Singapore Education Structure here
Figure 2: Desired Outcomes of Education here
Figure 3: Desired Intermediate Outcomes of Education here

Sources:
Economist Intelligence Unit, (2003). Singapore Country Profile, http://www.economist.com/countries/Singapore
Economist Intelligence Unit, (2004). Britain Country Profile, http://www.economist.com/countries/Britain
Mathi, B., (1996). ‘Top schools should take in bright foreign students, says Lee Yock Suan’, Straits Times, Singapore: SPH.
Ministry of Education, (2003). Shaping tomorrow today, Singapore: Ministry of Education
Ministry of Education, (2003). Education in Singapore, Singapore: Ministry of Education
Ministry of Education, (2003). Education statistics digest, Singapore: Ministry of Education
Ministry of Education, (2004). A Broader Picture of Schools' Performance in Academic and Non-Academic Domains, Singapore: Ministry of Education
Shanmugaratnam, T. et al., (2002). Report of the junior college / upper secondary education review committee, Singapore: Junior College / Upper Secondary Education Review Committee.
Statistics Singapore, (2004). Yearbook of Statistics Singapore, Singapore: Statistics Singapore
Statistics Singapore, (2000). Singapore Population, Singapore: Statistics Singapore.
Tan, J. (1998). ‘The marketisation of schools in Singapore: policies and implications’, International Review of Education, 44-1


Appendix 2: ASEAN Scholarships

Aim:
è To provide opportunities to the young people of ASEAN to develop their potential and equip them with skills that will enable them to confidently step into the new millennium.

On offer to:
è Association of South East Asian Nations (ASEAN) nationals of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, The Philippines, Thailand and Vietnam

Tenable for:
è ASEAN Secondary Three Scholarships tenable for four years, leading the award of the Singapore-Cambridge ‘O’ Levels after two years, and the ‘A’ Levels at the end of the 4 years.
è In selected secondary schools and junior colleges
è Renewal of scholarship annually, subject to satisfactory performance by the scholar

Stylised Applications Processes:
Procedure A
è For nationals of the following countries: Cambodia, Laos, Myanmar and Vietnam
è Students are nominated / endorsed for the scholarship by the Ministry of Education in their home nation.
è Short-listed applicants undergo an interview and a selection test for aptitude, especially proficiency in the English language.

Procedure B:
è For nationals of the following countries: Brunei, Indonesia, Malaysia, Philippines and Thailand.
è Interested students apply for the scholarship with the Singapore Ministry of Education.
è Short-listed applicants undergo an interview and a selection test for aptitude, especially proficiency in the English language.

Scholarship Awards:
è Living allowance
è Settling-in allowance
è Economy class flight allowance to Singapore, and back to home country at the end of 4 years
è Waiver of school and examination fees
è Subsidised medical benefits and accident insurance cover
è No bond attached to scholarship


Source:
Ministry of Education, (2004). ASEAN Scholarships, http://www.moe.edu.gov.sg/
[1] Otherwise known as ‘allocative efficiency’ (Levin 1976), (Barr 2004)
[2] The Science Research Programme is jointly organised by the National University of Singapore and the Ministry of Education and is to allow top students in junior colleges the opportunity to experience science research first hand. Guided by professional scientists and engineers, participants undertake a six-month project, which they present at the Singapore Youth Science Congress. Particularly successful projects have also been presented at prestigious international conferences and published in top international journals. http://www.science.nus.edu.sg/schools/srp/ for more information.
[3] Please see Appendix 1
[4] Singapore had top results in both mathematics and science, at both 4th grade and 8th grade in 2003.
[5] Advancement in society is primarily based on individual ability or achievement, disregarding wealth or social position
[6] The ‘educational triage’ acts ‘systematically to neglect certain pupils while directing additional resources to those deemed most likely to benefit’ in terms of the externally judged standards. For example, pupils at the ‘borderline’ between a C and a D grade get additional attention, because such emphasis ensures the greatest impact on the schools’ league table position.