EDUCATION is not only a basic human right it is also critical for socio-economic development. This is a universally accepted fact and the purpose of this article is neither to restate it nor to elaborate on the dismal state of education in Pakistan.

It is common knowledge, after all, that Pakistan has amongst the poorest educational indicators in the world. To quote just one report — Unesco's Education for All Global Monitoring Report — Pakistan is ranked amongst the top three countries in the world that have the highest number of out-of-school children. The issue of quality comes later, yet presents an equally dismal picture — even when compared to neighbouring South Asian countries.

Realising the crisis we face in this important sector, the government has recently constituted the National Task Force on Education. The purpose of this article is to reiterate, from an economist's perspective, the crucial role of government intervention in this sector — something that we have come to disregard over the past few decades under the influence of neo-classical economic philosophy (that itself is being challenged in the wake of the recent financial crisis) — and to suggest how blind reliance on the private sector, without any regulation, can have dire consequences on both the achievable quality of education as well as its affordability and access to it.

Education is a commodity in economic terms, but it differs from other commodities because of its public nature. To put it differently, unlike other goods, investment in education not only yields private benefits in terms of higher earnings but also social benefits that spill over into society in several ways a farmer may become more productive through basic numeracy and literacy skills; a literate woman may be able to take better care of the health needs of her family; and an educated person may potentially be a better citizen who is able to exercise his political and social rights.

Standard economic theory tells us that investment in such activities that yield positive externalities, if left to the individuals and markets alone, will always lead to underinvestment. This is because individuals, while making investment decisions, take into account the private returns only and not the social returns.

This results in the level of investment being less than what is desired from a societal perspective. So in order to encourage individuals to invest in education, the government needs to subsidise education — particularly basic education where the social returns are higher than at any other level. The Pakistan government has, in general, been targeting the education sector through supply side interventions and inadequate attention has been paid to the demand side.

Subsidising education, which can take several forms such as subsidies in school fees for low-income parents or the provision of free meals in schools, essentially targets the demand for education — something that the government may want to look into. Then, if we are concerned about equity in education — a highly desirable goal from a policy perspective — we need to remember that leaving everything to the market will not achieve this goal, as markets may be efficient but equity is not their concern.

Despite this clear and justifiable role of public intervention in the provision of education, the government has, over the years, been abdicating its responsibility in favour of an unregulated private sector.

While the private sector has played a crucial role in filling the vacuum left by the public sector in providing quality education, it nevertheless leaves a lot to be desired. High-quality private education remains outside the reach of the majority, and the unfettered drive for profit in the private sector has led to virtual cartelisation where a handful of elite schools exploit parents whose collective bargaining position is already weak.

What is the role of the 'Private Schools Association' in the free market, for example, when there is no such association for parents to enhance their bargaining position?

Given the huge societal and national stake involved, private schools need regulation to ensure that they are meeting certain pedagogical standards. The private sector needs to realise that education is serious business and that it is accountable. Currently, private schools are not accountable to anyone and can, to take just one example, set or raise school fees at will.

Teachers are rarely trained and poorly paid even in the best of private schools, which charge full fees for summer vacations but spend hardly a penny on teacher-training. Why not devote a few weeks during the summer vacations to training teachers? And why do schools charge full fees during the summer when their running costs and utility bills are minimal?

Most schools in Pakistan, including elite schools, do not have a teaching philosophy that meets current international standards. Syllabi are often outdated and it is at the absolute discretion of the school administration to follow whatever teaching strategy it thinks appropriate. Some schools, for instance, have gone to the extent of using advanced syllabus ahead of the relevant class, although research shows that teaching a child something he is not mentally ready for may be counterproductive.

Given some of these undesirable features of private-sector education at particularly the school level in Pakistan, it is crucial that the government provide quality education on the one hand, and regulate while encouraging the private sector on the other.

Only then will quality standards be met and education provided in a transparent and affordable manner. Annual or biannual audits of private schools are urgently required to make sure that schools are not making undue profit under the excuse of providing quality education. Teacher-training must be made mandatory and a legal minimum standard should be set in terms of teachers' salaries.

One hopes that the newly formed task force on education will consider these matters while formulating policies in a sector that will ultimately determine the fate of this country.

The writer is a research consultant and visiting faculty at the Pakistan Institute of Development Economics, and a founding member of the Centre for Research on Economic and Social Transformation, Pakistan.