I recently read an interesting book by James Tooley called The Beautiful Tree: A Personal Journey Into How the World's Poorest People Are Educating Themselves, published by the Cato Institute.
This book describes how the governments of many countries in the developing world are failing to educate their children, because their government-run schools are basically worthless. The author described seeing many schools where only a small fraction of the teachers even arrived at the school on any given day, and an even smaller fraction were engaged in meaningful teaching activities (he also did careful studies that documented these problems, as well as poor educational outcomes); this system was made possible by wide-spread government corruption. Perhaps it is no surprise that everyone involved is apparently aware of the issues at the government schools, from the children and their parents, to government officials at all levels, to the international aid agencies and foreign governments that continue to give money for education to the government agencies that are running the schools. So of course, middle- and upper-class families living there send their children to for-profit private schools.
But the real surprise in this book was that Tooley found that many extremely poor people in these countries were also sending their children to for-profit private schools -- low-cost schools run by entrepreneurs of similar backgrounds to the poor families, living in the same neighborhoods (rural areas or urban slums). And although these poor private schools tended to have dismal facilities by our standards (poor lighting, poor sanitation, etc.), this was more than balanced by much greater level of accountability than the government-run schools, as parents would immediately withdraw their children (and their tuition money) from poorly-performing schools. Tooley also documented, through careful study, that these low-cost private schools (so low in cost as to be affordable by workers at the very bottom of the social scale) had much better educational outcomes than the nearby government-run schools.
After reading this book, I was left wondering (as Tooley certainly intended) why international aid organizations and US and other governments would continue to pour money into corrupt and ineffective government-run educational programs in these countries. Tooley suggested instead that we direct our aid money in two directions that seemed worthwhile to me. First, he suggested setting up scholarship funds for poor children's tuition in the low-cost private schools. The cost of such tuition per student is very low, in US dollars or European currencies, and the return in educational provision is high. Tooley has apparently already been involved in setting up one organization that provides such scholarships. Second, the major barrier for educational entrepreneurs in setting up or improving their schools is the lack of financing -- banks will not or cannot lend to them, in spite of their financial soundness. So, the idea would be to set up micro-credit institutions dedicated to funding such educational ventures. I haven't been able to find any projects of this nature that are in progress, but definitely the ideas of micro-credit are well developed in general, and maybe someone will start one up soon. We'll have to wait and see.