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Journal of Educational Administration 39,4 346

Economic rationalism and education reforms in developed countries

Y.L. Jack Lam

The Chinese University of Hong Kong, and Received April 2000 Revised September 2000 Brandon University, Manitoba, Canada Accepted November 2000 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 ``economic rationalism'' is contended to be the primary driving force shaping the nature 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 a more turbulent environment.

Journal of Educational Administration, Vol. 39 No. 4, 2001, pp. 346-358. # MCB University Press, 0957-8234

Introduction All over the world, the public education system is grappling with an unprecedented wave of change unprecedented in its magnitude and scope as no area has been deemed exempt from close scrutiny. Educational goals and objectives are revisited and rewritten. School systems have been restructured. Decision-making mechanisms within the school organization have been decentralized. Curricula have been revised. Stakeholders have greater opportunity 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 ``A nation at risk'' (Negroni, 1992). In England, preceding the enactment of The Education Reform 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 in the fall of 1996, with an undisguised restriction on members engaging in debates (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 in these countries to regain their initiatives and to exercise greater control over

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 from higher to lower levels of education, giving more students greater educational opportunity. There will also be increases in school fees to bridge the gap between the actual cost and subsidies. Further, school expenditure will be reduced by holding down salary bills, increasing class size and making greater use of teaching in shifts. The second type of reform is known as ``equity-driven'' reform. By definition and design, equity-driven reform aims at providing high-quality basic education or greater educational opportunities to the disadvantaged populations. These include students ``at risk'', students from low-income families, students with special physical and mental needs, women and rural populations. Reallocation of resources within the educational system, creation of educational programmes, development of non-formal education and alternative 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 ``competitivenessdriven'' reform. Underlying this approach is the recognition (OECD, 1992) that the human factor is critical to success in competitiveness and prosperity. Competitiveness-driven reform stresses organizational restructuring, greater program 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 not mutually exclusive. Under the competitive model, some schools in England attempt to exclude children with behavioral difficulties (Deem et al., 1993). This, however, is not endorsed by the Government as ``efficiency'' (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-driven reform might have on the equity issues such as racial, ethnic and socioeconomic segregation (Stedman, 1992). That competitiveness-driven reform does not necessarily preclude equity-driven reform is clearly illustrated in four successful reform programs. Henry Levin's Accelerated School Project, Theodore Sizer's Coalition of Essential Schools, James Comer's School Development Program and Robert Slavin's Success for all (Lockwood, 1995), all point to the fact that effectiveness can be achieved without sacrificing equity. In Canada, affirmative action of assisting disadvantaged groups and special needs populations goes hand-in-hand with measures that are akin to competitiveness- and finance-driven reforms. Equity is achieved through

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distance delivery of education to remote clientele, and greater autonomy to aboriginal education. In the same stroke, finance-driven reforms which tighten control over higher education, holding down school expenditures, and reconditioning the negotiation process for the public schools are equally obvious (Lam, 1998). Canadian school reforms are not complete without the inclusion of competitiveness-driven reform features. In Australia, ``commercial budgeting'' (governed by a target rate of return) is tempered with the ``social budgeting'' (concession of access by those on low income). Vocational education and training (VET) represents a ``second chance'' for the educationally disadvantaged, and their tuition has been deliberately kept low (NBEET, 1995). Origins of school reforms To educators, the intermingling of different types of reforms suggests that the effort is at worst a desperate, hodge-podge intervention, aims at removing deep-seated problems over the past decades. And, at best, it is an unsystematic attempt to plot a new direction for the school system, which is in need of a large-scale overhaul. However, when we assess the current reforms, some haunting questions need to be answered. Do the current changes represent a random selection of meddling strategies and policies? Or do they signify systematic sets of procedures rooted in some coherent ideology? Given that there is a spontaneous push for comparable school changes under apparently very dissimilar societal conditions, national or regional priorities and needs, political agendas, cultural and historical uniqueness, are the reforms then primarily the results of chance or some unannounced collaboration? Or can we attribute these to some international conspiracy? Exploration of existing reform 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 less consensual and more a matter of conflict. In the USA, it was the Federal government's document, ``A nation at risk'', that aroused Americans to do something about their schools (Negroni, 1992). In England, Margaret Thatcher's determination to purge English culture of what she saw as its many weaknesses, and to restore ``Victorian values'' paved way for the Education Reform Act of 1988 (Aldrich, 1994). In Canada, it was the Conservative Government's ``prosperity initiatives'' that triggered the ``Victorian Declaration'', unifying all Provincial Governments to undertake reform (Lam, 1998). In Australia, serious steps in reforms began in 1983 with the election of Hawke's Labour Government. Insufficient federal grants, coupled with increasing functional responsibilities, reactivate the dormant state governments. Thus, in contrast to all the previous reforms, it was the political parties in power, not the bureaucrats nor educators that engineered recent educational changes. But such an explanation falls short on why these respective governments chose to act almost at the same time with similar agendas. One

point of view (Reid, 1996) cited a combination of reasons for the sudden upsurge against the status quo in education. These include the rising unemployment or static or falling real incomes, declining public confidence in institutions of all kinds, a better educated and more demanding population, disillusionment with the results of the earlier reforms, and an aging and more conservative population with increasing political pluralism. While evidence supporting these reasons is not lacking, it is doubtful that these reasons alone propel concerned governments to act. One needs to note that while the criticism of public education is more widespread, support from parents remains high (Livingstone, 1995). Educators have good reason to believe that general confidence in the education system is far higher than that placed in other public institutions. If this observation is correct, changes in the educational system should have received a lower priority than reform in other public systems. And yet, this is not the case. Some who are engaged in the study of government policies argue that a specific 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 the governments for policy development and implementation. From this perspective, some may subscribe to the idea that the reform is the offspring of the New Right or neo-conservative ideology. Encompassed in the neoconservative view are three main beliefs: (1) public institutions, including schools are failing to perform satisfactorily; (2) the unfettered market is the preferable form for regulating all institutional activities; (3) the role of government should be reduced. Reference to the reform agendas shows while the first two beliefs seem to be firmly 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 for tighter control in matters related to fiscal and resource management, curriculum content, staff and school performance appraisal, and the general goals and direction of the school. Thus, neo-conservatism contributes only partially to school reforms. If there is a missing piece in the jigsaw puzzle, it is the emergence of the business groups who shape the governments' initiatives (e.g. Mazzoni, 1991). Business leaders have chaired important commissions on education in both the USA and Canada, even the exclusion of representatives of the educational

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community (Good, 1997). They have issued influential reports such as Minnesota Business Partnership or the Conference Board of Canada (Levin and Young, 1997). In Britain, the reform legislation weakened the power of the providers 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 and Vidovich (1995) and Burke (1997) all came to the same conclusion: that the education sector is under siege from philistine economists. The economic rationalistic viewpoint, reinforced in part by the worsening social and financial conditions, and in part by neo-conservative ideology, provides a fuller picture as to how education reforms come about in developed countries. That economic rationalism should be the steering force has much to do with the sweeping changes in the world economy. Martin (1995) asserts that the changes reflect the increased globalization of economic activities, growing competition among nations for markets and the widespread impact of the information and communications revolution. In this context, all economies have to adjust to new structural realities, and the education sector, being critical to the application of knowledge and information to production, is a focus of great attention in most societies. To put this in another way, under the structural transformation of the postmodern economic activities, coupled with intensified trade competition, the governments in the developed world underscore their political need to set the ``proper'' agendas so that reforms will be implemented as planned. The prescription of deadlines is likely goaded by the apprehension that if reform is to follow its natural course of progression, there is no assurance that the concerned countries can keep abreast with their counterparts in human resource development. Given all these economic, structural and ideological pressure for change, and the general concern for progresing at similar paces among the developed nations, some mechanism is still needed for the governments of these countries to engage in initial information exchange and to arrive at consensus of decisions and union of action. Such a mechanism has been found in an umbrella organization that all these concerned countries belong to the Organization for Economic Cooperation and Devlopment (OECD). Indeed, throughout the past decades, the work of a subcommitte of the OECD, namely, the Public Management Committee and the Public Management Service (PUMA), supplemented by publications from the Centre for Education Research and Innovation (CERI), helped shape a unified position for the developed countries and syhchronize their reform strategies and efforts. Framework depicting the relationship between economic rationalism and school reforms In accepting that the school reforms are not random but deliberate, not accidental but planned, not piecemeal but holistic, not region- or countryspecific but universal, we must, by logic, recognize that reforms are grounded

in some common economic framework. Central to this framework is the concept of ``economic rationalism'' that must therefore receive some clarification. To many educators, disillusioned by their government's abrupt change of course in funding public education, economic rationalism represents ``a kind of ideological gridlock in which economic instrumentalist imperatives are given precedence. . . The technical-rationalist emphasis on job skill development has tended to subordinate educational considerations which seek to develop higher cognitive 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 nor heedlessly borrowed from some convenient economic principles. Rather, it represents a painstaking reflection and a complete overhaul of past remedies that either bandaged superficial problems or tackled shortcomings piecemeal. In repudiating the unsuccessful experiments which poured resources into a system with diminishing returns, the governments of the developed countries search fresh insights and models from the private corporations which make these enterprises successful. Inevitably, a new set of criteria in reorganizing and 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 current situation, a realignment with the political, economic, social and cultural conditions of the countries concerned is critical. A search for supporting evidence to testify a set of possible relationships in the concerned countries seems 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, which provides the basis for developing a set of principles. These principles govern the agendas of reforms. Through the set agendas, some common threads can be readily identified. Conceptual source and basic principles Conceptually, economic rationalism as the hegemonic cornerstone of educational changes aspires to guarantee the quality of human resources in preparation for the new economic world order. Harbored in the economic rationalistic perspective is a set of principles, now becoming common terms adorning 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 the case of the USA, efficiency has been resorted to accomplish political transformation (Negroni, 1992). In the case of Britain, the concern is to restore the balance after the economic defeats at the hands of two of her former

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Journal of Educational Administration 39,4 352

Figure 1. Conceptual framework for current school reform

adversaries Germany and Japan (Aldrich, 1994). In the case of Canada and Australia, efficiency becomes the salvation principle against ballooning national 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 five decades, educational research had focused on the effectiveness of these two dimensions by comparing different instructional approaches, different intervention strategies, different resource inputs, different structural arrangements, all without definitive conclusions. The trouble is, most of the process quality and effectiveness are contingent on the nature of contextual variables, which are difficult to control or even assess. The acceptance by most governments in developed countries of the ``corporate management'' to the public sector marks a radical shift in the treatment of education from ``a closed system, process-oriented, and role based approach to an open-systems, outcome-oriented and goal-based approach'' (Boyd, 1992). Central to the concept of productivity is the need to reorganize educational programs and finance to achieve ``cost-effectiveness'' (Odden and Clune, 1995). To these scholars, low productivity stems from poor resource distribution, unimaginative use of money, insufficient professional development, a failure to

focus on results and engage in practices such as reducing workloads and lowering 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 entrenched in the mentality of reformers. Starting as ``domesticated enterprises'' (Carlson, 1975), having no need to justify its existence, the school under the reform movement is challenged to be more ``accountable'' to the public. To some (e.g. Luhm et al., 1998), accountability is explored in the context of student achieving. To others (e.g. Kirst, 1990), accountability has a much broader connotation than outcome-based performance. Kirst identifies five other approaches of achieving accountability: through monitoring and compliance with standards/regulations, through incentive systems, through reliance on the market, through changing the locus of authority or control of schools and through changing professional roles. In formulating the typology, Kirst stresses that the six categories should be combined in creative and effective ways. Given their diverse sources of origin and their separate paths of development, the three principles are highly interrelated with on another. One cannot conceive efficiency without high productivity Neither would their absence be acceptable when accountability is being pursued. It is little wonder, then that when education reform literature is reviewed, it is quite frequent for these terms to be used interchangeably. Agendas of education reforms Mechanisms for compliance. Arising from these three basic principles are specific measures that add teeth to the governments' initiated school reforms. To put these measures in place, the concerned governments normally resorted to the creation of legislative acts, policies and/or directives to ensure compliance from the educational communities. In the USA, the parliamentary systems make it much more difficult for the government to put together and implement a coherent set of policy proposals (Keedy and Freeman, 1997). North Carolina had four very different reform programs between 1984 and 1991. South Carolina (Ginsberg, 1995) had three. Nonetheless, there is an unending series of reform proposals from politicians seeking to put their personal stamps on education policies. In England and Wales, formulation and enforcement of the central government's agenda were less complicated. The Thatcher-Major governments passed a series of laws, notably, the Education Acts of 1988 and 1993, which became 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 provincial government tended to follow its own tradition and pace in implementing comparable reform agendas. In Ontario, New Brunswick, for instance, the reform paces are swift, and breaks from the tradition are dramatic. In Alberta,

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Journal of Educational Administration 39,4 354

Manitoba, Saskatchewan, and most the Maritime Provinces, the pace of reform is more gradual and continuous of the established policy patterns. In Australia, influenced strongly by the general premises laid out in the key report, Quality of Education in Australia (Karmel, 1985), the Commonwealth government and the state governments, in turn, utilized resource allocation to bring educational communities in line with the defined policies. Both passive allocational mechanism (spending on chosen activities) and active allocational mechanism (encouraging behaviors complying with policy goals) are employed (Harrold, 1996). Reform agendas. Much literature exists from American sources documenting different kinds of education reforms. Cibulka (1990), perhaps more so than others, has developed a taxonomy for summarizing types of reforms. Among the so-called ``core reform'' strategies he identified, many state governments have adopted centrally mandated higher standards, efforts towards greater teacher professionalization, school empowerment, promotion of higher order thinking skills and dropout prevention programs. Among those being labeled as ``ancillary reforms'' are provision of performance incentive, deregulation, accountability, school-based community control, greater opportunity 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 massive increase in central control as the Secretary of State has been given 415 new powers (Lawton, 1989). There is also the creation of a national curriculum and a testing program. On the other hand, schools are given the right to opt out of the control of their local authority, forcing the latter to provide at least 85 percent of the funding needs based on some centrally-defined formulae. School governing bodies consisting of parents and community representatives are empowered to look after staffing and budgetary allocation for individual schools. Schools and local authorities are to publish test results of students so that parents can choose schools for their children. In the Canadian context, while individual provincial governments might have different traditions and priorities, there are sufficient common grounds in the agendas to suspect that some general framework must have been agreed among 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. School performance is measured largely in terms of student achievement, and this necessitates the identification of core curriculum and expansion of testing programs (e.g. McEwen, 1995). To streamline administrative jurisdiction, school districts are reduced in number and schools are empowered to look after operational details. Parents and community members were approached to assume more important roles in the school governance structure. Parental choice and competition were considered to be a desirable foundation for the education policy.

With respect to the situation in Australia, reforms have been focused on policies that deal with educational goals and outcomes, and the use of ministries to separate regulation, monitoring and funding functions. Emphasis was also placed on decentralization and devolution, output accountability, benchmarking, development of management information systems and the encouragement of institutions to be entrepreneurial and financially self- reliant. In the area of the curriculum, there is a reaffirmation of competency-based education, rationalizing learning around key areas and profiling (Australian Education Council, 1992). In many ways, curriculum changes represent a shift toward outcome-based education. Common reform features among the four countries. Close scrutiny of the reform agendas across the four countries reaffirms the fact that almost all features that constitute the reform agendas are associated with efficiency, productivity and accountability, the three principles that sustain economic rationalism. For the Americans, efficiency is achieved through deregulation, performance incentive, and school empowerment. In England and Wales, aside from the same strategy of school empowerment, centralization of control and curriculum are viewed as reliable mechanisms to attain the same objective as the national government is dissatisfied with the results of past changes in the hands of professional educators and local education authorities. In Canada, efficiency is accomplished by a reduction of funding. This is accompanied by a reduction of school districts in many provinces, by a general attempt at identifying, core curriculum and again by school empowerment. Likewise, in Australia, through allocation of resource correspondent to education outcomes and 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 upon setting higher standards for both students and staff. Raising students' performance and increasing professionalization of teachers are viewed as parallel mechanisms to increase productivity. For the British, the focus is placed upon testing programs and assessment. The Canadians and the Australians have resorted to the same strategy. However, the latter have gone one step further by openly encouraging an entrepreneurial, self-reliant spirit among 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 the four countries. A fundamental conviction that sways the concerned authorities is that unless the school system is accountable to the students served and their parents, who can exercise the option rights on behalf of their children, there is no assurance that the system can improve or retain the momentum to improve. A second general approach to enhance accountability is to empower schoolbased community control so that educators should learn to accommodate the expectation of their constituencies. In Australia, there is the additional ``benchmarking'' system to strengthen output accountability.

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Conclusion In 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 a spirit, 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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