Scandinavian simplicity

My favorite piece of furniture is an elegant rosewood desk that was custom made in Denmark.  Like most of my possessions, I bought it out of someone’s house.  This was back before Craigslist (I basically stopped buying stuff at age 45; thank God they don’t depend on me for sales tax revenue.)  Of course Scandinavian furniture is known for its “less is more” aesthetic, although I’d say Ikea overdoes the “less” part.  There’s a difference between timeless elegance and dorm room utilitarian. 

I believe that there are some artistic theories that mix ethics and aesthetics.  I suppose simplicity is seen as being more honest.  Keat’s truth is beauty.  The Bauhaus aesthetic was linked to socialist ideals, whereas the Italian Baroque was associated with the Counter-Reformation.

I’m not a big fan of attempts to mix ethics and aesthetics, but when it comes to politics and economics, I definitely think less is more.  I was reminded of this when frequent commenter Malavel sent me a new Swedish regulation requiring at least 15% down-payments on all mortgages.  That’s it, no bells and whistles, just 15%.  Check out the simplicity of this press release.

Sweden also has an income tax that is much simpler than ours (yes, I know that’s faint praise), where many (most?) taxpayers simply receive a bill in the mail.  Their vouchers for education don’t require you to live in Milwaukee, or enter a lottery.  Everyone in the country is eligible, and their kids are free to go to any approved school; public, not-for-profit, or for-profit.

In America, the left told us that the banking fiasco was caused by ”de-regulation,” which allowed banks to run amok making sub-prime loans.  The right insisted it was the government’s fault; Fannie Mae and Freddie Mac and FDIC creating moral hazard.  Both are partly right.  In response our legislators produced a 1000 page bill that failed to address any of the alleged causes of the crisis.  Not only are sub-prime loans not banned, but FHA is actually encouraging more sub-prime lending.  The GSEs got off scot-free, and FDIC has not been reformed at all.  It’s still insuring wildcat banks in the South, who take taxpayer-insured deposits and lend the money out to highly risky construction projects.

If only we could have an economic policy regime that reflected the simplicity and elegance of Scandinavian furniture.  When I saw the Fed’s alphabet soup of special vehicles created to address the financial crisis, I pretty much knew we were in trouble.  The Fed forgot that its duty was very simple—just provide enough money to keep the price level rising at 2%.

The left was ecstatic about the appointment of Elizabeth Warren.  I have nothing against her, although I was a bit puzzled to learn that the main lesson of this crisis was that we needed to do a better job of protecting the financial industry’s consumers.  (Scratches head.)  But let’s say I’m wrong, and she’s the superwoman her supporters believe her to be.  How does that really help us?  Before too long the Republicans will be back in power, and she’ll be out of a job.

If you are visiting a dysfunctional tropical country, it’s common to have people talk wistfully of the need for a “strong man” to be put in charge.  But with the possible exception of Singapore, that almost never works.  Unless you put into place a democratic, transparent and non-corrupt system of governance, there is a real danger of back-sliding as the strong man becomes corrupted by power, or is replaced by someone less honest. 

It’s sad that we’ve reached the point where Congress writes a 1000 page bill that completely fails to address the problems that caused the worst economic disaster since the 1930s, and then we instead pin all our hopes on Elizabeth Warren.  The elation that greeted her appointment was the sort of thing you’d expect from a mob of supporters when a Putin or Chavez announces he’ll run again, as there is “no one else capable of doing the job.”

In art and architecture it is not always true that simplicity is best.  I’ll take Borromini’s Quattro Fontane over Le Corbusier’s Radiant City.  But in politics and economics the simplest and most transparent regulatory regime is generally best.  K.I.S.S.

PS.  Of course the Swedish program has problems just like any other system. But progressive skeptics might be surprised by the nature of those problems:

 

One of the first independent schools, Botkyrka Friskola, was started by an ex-communist in a low-income, immigrant suburb of Stockholm. With an emphasis on individual student responsibility, familial involvement, and efficient use of technology, it now has over 2000 students waiting for one of its 240 places and a continuous stream of educators interested in imitating its success (Svangren 1998).

Public Vouchers and Public Controls

Though public vouchers are invigorating the Swedish education system and broadening the educational choices available to families, they have come with some strings attached. The first of these is the government’s demand that independent schools select their pupils on a first-come, first-served basis. Special exceptions are granted only for siblings of current students, students with special needs, and those who live in the immediate vicinity of the school (Gustafsson 1998). Most independent schools are happy to accept students on this basis and would have done so even without this regulation.

The condition makes it difficult, however, for a school to establish a particular learning environment and does nothing to guarantee the equal access it was set up to ensure. Per Svangren, the principal of Botkyrka Friskola, hoped his school would become a challenging, multicultural environment for immigrant families poorly served by the local municipal school but, as its reputation grew, Swedish families in neighbourhoods with better schools began applying early. The school had to take the students who applied first, so it was forced to reject those whom its leaders believed would not only benefit most but also contribute most to the school’s unique environment. As a result, a fundamental aspect of the school’s mandate was compromised (Svangren 1998). Though they would be rare exceptions, (as experience in Denmark demonstrates) schools established for the academically gifted or those for a particular learning disability are impossible in this environment. It is a loss to Sweden that its politicians prohibit families from choosing a specialized education for their children and prohibit schools from making such educational alternatives available for them.

 


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27 Responses to “Scandinavian simplicity”

  1. Gravatar of Indy Indy
    3. October 2010 at 14:58

    I think Caplan’s “kilo-page” coinage is a fantastic, if a little awkward to my ears, coinage. It’s actually more useful to describe a period than the length of a particular bill.

    When I say that we now live in “The kilopage era of government” or “the kilopage phase of our democracy” it sounds completely natural.

  2. Gravatar of Jason Jason
    3. October 2010 at 15:12

    I’m not sure there is a problem with the finance bill not addressing “the real causes”. It appears designed to give political cover to whoever wants to do something TARP-like again (in addition to addressing a few Democratic planks for the base because they could). People will probably also just plain forget how much they hated TARP.

    Panic started, then TARP happened, and society didn’t collapse. You tell us the subsequent unemployment/growth problems are primarily monetary policy. If it ain’t broke, don’t fix it.

  3. Gravatar of ssumner ssumner
    3. October 2010 at 16:19

    Indy, Yes, kilopage is a great term.

    Jason, We are spending 100s of billions of dollars bailing out the GSEs and FDIC. It is broke, and needs to be fixed. The GSEs need to be abolished, and we need a law mandating a minimum 20% downpayment on any loan made with FDIC-insured funds. I’m tired of my tax money having to pay for the mistakes of reckless banks.

  4. Gravatar of WhiskeyJim WhiskeyJim
    3. October 2010 at 16:31

    Bravo, Mr. Sumner.

    In a related matter, banks used to hold 25%+ capital. Since regulation, they hold about 5%.

    We need very simple regulation, which includes very simple rules about the transparency and representativeness of financial statements.

    The simplicity alone would force risk adversity.

  5. Gravatar of Richard W Richard W
    3. October 2010 at 16:58

    ‘ The GSEs got off scot-free…’

    Keeping to the Scandinavian theme.

    ‘Scot’ is a Scandinavian word for tax or payment. It came to the UK as a form of redistributive taxation which was levied as early the 13th century as a form of municipal poor relief. The term is a contraction of ‘scot and lot’. Scot was the tax and lot, or allotment, was the share given to the poor.

    Scot as a term for tax has been used since then to mean many different types of tax. Whatever the tax, the phrase ‘scot free’ just refers to not paying one’s taxes.

  6. Gravatar of Ram Ram
    3. October 2010 at 17:01

    In my view, Gary Gorton’s “The Panic of 2007″ (reprinted in his 2010 book, “Slapped by the Invisible Hand”) is the most persuasive take on the financial dimensions of the recent crisis. According to more recent work by Gorton, while the Dodd-Frank bill does not directly address what he considers to be the central problem(s) in the shadow banking system, the bill creates a ‘Financial Stability Oversight Council’ that is well-positioned to make the changes he is calling for (in a nutshell, extending FDIC-like protections to bank holding companies in exchange for bringing them out of the regulatory shadows). This is not ideal, of course, because as time passes memories of the crisis will fade, which will ease pressure on the FSOC to maintain these policies in the face of heavy lobbying by the financial industry. Still, it seems a bit too strong to say that Dodd-Frank did not address any of the alleged causes of the crisis.

    As for the GSEs, the Obama administration has said that it wants to reform these institutions with a separate bill. I do not know whether such a bill is in the works, but this may give some clues as to the direction such reforms might go in (if they ever become law):

    http://gregmankiw.blogspot.com/2010/08/notes-form-sixth-row.html

  7. Gravatar of Nuveen Nuveen
    3. October 2010 at 21:52

    I’m curious as to the target of this post. I think most on the left agree with you: Dodd-Frank doesn’t address a lot of the problems that caused the crisis and simple structural reform is preferable to greater regulatory authority. But most on the left think that what we got was a result of the vicissitudes of Washington politics. What do you think the problem is?

  8. Gravatar of Mikael Mikael
    3. October 2010 at 22:43

    Slightly of topic but related…

    The reason for the aforementioned regulation of 15% min down payment in Sweden.

    http://www.scb.se/Pages/TableAndChart____74160.aspx

    The dotted line is consumer prices, the rest of the lines are various types of houses. Anyone that think it will burst soon?

    The 15% min down payment is offered as blanco credits from banks instead. Most people here say it will not have any effect on the housing bubble and I think it would make more sense to demand more payments on the loans beside just the interest. The interest is also tax deductible in sweden and the could be removed to deflate the bubble.

  9. Gravatar of Mikael Mikael
    3. October 2010 at 22:45

    Forgot to mention that the last “hickup” during the 90-ies on that graph was called “house market crash” over here and some people still pay on their loans from back then.

  10. Gravatar of woupiestek woupiestek
    4. October 2010 at 00:02

    Wow, Scott,

    Almost everyone I know favors a public schooling system here in the Netherlands. These posts are a real eye opener for me.

  11. Gravatar of mbk mbk
    4. October 2010 at 01:58

    Minimum down payments vary wildly across countries. In Singapore it’s now 20%, and 30% for second homes. But only 3 years ago it was 10, then 5, then 0 percent as the market was down. In the much laughed about Italy I hear it is 30% for instance. Italy also introduced a super simple income tax system in the 90′s with just 2 brackets, 25 and 40 % (don’t know what happened to it since). That was a response to the previous system where the income tax paperwork could run up to 100 pages according to press reports of the time. So, countries do reform, not all chliches are true etc.

    What puzzles me is this system in the US where people can just stop payment and walk away from a mortgage. I know of no other country where this can happen. Normally you walk wherever, but you still will be filing consumer bankruptcy.

    The general problem with kilopage bills is the over-centralization which removes the center too far from the actual action. Same happens in the EU. But again, the much maligned EU has in the past few years held happenings where useless regulation was ceremonially scrapped (kilos and kilos of it). This was in response to outcries over legiferating the curvature of bananas allowable in supermarkets or the famous requirements to display nothing but the left shoe in shoe stores.

  12. Gravatar of scott sumner scott sumner
    4. October 2010 at 05:28

    WhiskeyJim, Good point. In the old days before FDIC, banks were more conservatively managed. It would be best to have zero regulation, but as long as we have FDIC, we need to regulate what they do with that government money. But the regulations should be simple.

    Richard, That’s interesting, I didn’t know that.

    Ram, Extended FDIC is a mistake, they need to severely reform those institutions. And they haven’t done so.

    The GSEs should be abolished, they play no useful role in our economy.

    Nuveen, You said;

    “But most on the left think that what we got was a result of the vicissitudes of Washington politics. What do you think the problem is?”

    I completely agree.

    Mikael, I’m no expert on the Swedish housing market–indeed I am the opposite of an expert. My hunch is they should have required 20%, down, and also eliminated the tax deductibility of mortgage interest.

    woupiestek. Yes, and think about this:

    1. Sweden and Holland have similar civic-minded cultures (well I’m sure they seem different to you, but similar on a world scale)

    2. The left in Sweden initially opposed the idea.

    3. Now most of them have been forced to support it, because it is so popular.

    4. Holland is far more densely populated than Sweden, making competition easier.

    What’s Holland waiting for?

    mbk, Those are interesting facts, I didn’t know Italy’s top rate was lower than ours. (We are at 42% federal and about 50% including local (starting next year.)

    Yes, the no-recourse loans are very strange. Furthermore, buyers can refinance when rates drop, but lenders can’t refinance when rates rise.

    But I think some US states are different on the no-recourse loans–is that right?

  13. Gravatar of OGT OGT
    4. October 2010 at 07:21

    I think the paper Ram linked to in your earlier discussion on school choice is fairly persuasive that information asymetries and expense in evaluating education outcomes can make a voucher system with no limits on acceptance by schools problematic.

    Essentially what seems to happen is that schools compete for anti-lemons, because its easier to build a reputation picking good students than it is to educate disadvantage ones. For parents it seems to matter less whether the school’s value added is higher or they would just be surrounded by better peers. Schools end up more socio-economically segregated with little educational improvement.

    One only really has to look to the US Higher Ed system, where non-instruction spending has been rising at a clip of more than 60% above instruction costs, to see this dynamic. It is part of what you’ve noted in the Country Club-ification of dorm rooms before. It is agruable that the admissions department, physical plant and student activities add more to the economic viability of Bentley than entire faculty who could be swapped at random from professors around the country with little to no difference in the school’s viability. I don’t mean that as a slam on you or your colleagues just to demonstrate incentive distortions with poor information. (This may be less true at a Harvard, where celebrity prof’s are prized though not for their teaching abilities).

    The voucher system I’d favor would probably fail your KISS test, since I would require budget reporting by a set of spending departments (admin, instruction, etc) and for all schools accepting vouchers to take the same standardized tests which would be publshed as a part of a value added analysis. These, by the way, are the similar to the reforms I’d like to see in higher education. In addition, I think there would, at the least, have to be some incentive system for the schools to take less advantaged or learning disabled kids in terms of renumeration per pupil.

    All that said, it is very hard to actually tease out what makes a good education system since so much goes into the final results. The best education system outside of Asia in Math and Science, for example, is the public school system in… Massachusetts.

    http://timss.bc.edu/TIMSS2007/PDF/T07_M_IR_AppendixB.pdf

    http://timss.bc.edu/TIMSS2007/PDF/T07_S_IR_AppendixB.pdf

    Link and discussion of the Ram paper.

    http://collegeaffordability.blogspot.com/2010/02/anti-lemons-paper-is-great-not-useless.html

  14. Gravatar of Tomasz Wegrzanowski Tomasz Wegrzanowski
    4. October 2010 at 12:06

    scott: Swedish-style education vouchers sound like a wonderful idea to try, and I hope Tories manage to *try* something similar in UK – even though I’ve seen how deregulating Polish higher education system just created a lot of extremely low quality diploma mills. This is big worry I have – there’s always a lot of fighting up front, but then nobody ever evaluates the results.

    For every successful privatization, many are either dubious (Thames Water, Telekomunikacja Polska), or dismal failures (British rail companies, every Russian privatization ever) or way worse than even that (American prisons). Yet all discussion and interest rapidly stops as soon as privatization is done. This cannot be a good thing? Even if privatizations tend to be good on average, we should be trying to figure out how to do them better, as variability is very large, and cannot be explained just by country.

    Anyway, here’s my favourite privatization story – barely remembered by anyone even in Poland. National Bank of Poland had total monopoly on banking – other than 2 or 3 quasi-bank savings institutions it was literally the only bank in entire country. It had no capital, no experience with market economy, nothing.

    It was swiftly divided into central bank (before 1997 Constitution cleaned everything up, the issue of how much independence particular institutions possessed had more to do with personalities and political balance of power than with any written law) and about 10 regional privately run banks.

    By any reasonable estimate this should have failed. There was >500% inflation, Polish Zloty was never used for savings, borrowing, or any other large transactions. There was nearly zero consumer banking, nearly zero private banking, their main business were loans to badly performing state-owned companies were just massive liability and government was highly unwilling to bailout any of them except hospitals, and contract enforcement via legal system was only available if you had infinite time. On top of that ranges of regional banks did not overlap at all so there was no competitive pressure.

    Just a few years later, you see inflation 10% unemployment most of this time but this was genuine economic restructuring – number of private jobs kept skyrocketing, but failing state-owned companies were shedding them very fast as well – this is nothing like low aggregate demand)

    Privatizations can be just that successful. Usually they’re not. Do we have any way to predict and control how they’re going to turn out? It sounds like it should be an extremely important question for everyone from moderate left to extreme right, but nobody cares. Why?

  15. Gravatar of Lew Lew
    4. October 2010 at 15:59

    A quick comment on the commenter’s idea above that having two tax brackets makes things simpler. The number of tax brackets isn’t the problem. It is all the other stuff in the tax code. Have 500 tax brackets for all I care. Just eliminate all deductions and different treatment for various income types and there you have it. You take your income look up your tax in the book and it is done.

  16. Gravatar of scott sumner scott sumner
    5. October 2010 at 06:01

    OGT, It’s interesting that at the k-12 level we go with the monopoly public school system, and get very mediocre results. At the university level we have vouchers that can even be used at Catholic universities, and end up with by far the best university system in the world (17 of the top 20). So I think choice and competition is a good idea.

    As you know the Swedes don’t allow schools to cherry pick. That may or may not be desirable, but it’s not subject to the criticism raised by Ram. And even the Swedish system would be a vast improvement over our current system, especially for poor students that live in the inner city.

    I think you overrate the Massachusetts system, as the workforce around here is far more highly educated than the national average. Thus it’s not surprising their kids do well. Our main industries are college ed, elite hospitals, biotech, software, defense electronics, financial services. That’s not a workforce that should be compared with other countries.

    Massachusetts also has a more decentralized regime than most states, with only one city above 200,000 people. Most people live in small suburbs that are very close to each other. That provides a greater than average amount of choice.

    Tomasz, The UK Conservatives have said the Swedish system is too right wing for them, so they won’t adopt it. They object to for-profit schools.

    You said:

    “For every successful privatization, many are either dubious (Thames Water, Telekomunikacja Polska), or dismal failures (British rail companies, every Russian privatization ever) or way worse than even that (American prisons). Yet all discussion and interest rapidly stops as soon as privatization is done.”

    Just the opposite, for every failed privatization, there are dozens of successes. American prisons that have been privatized have far better conditions for inmates than state run prisons, so I have no idea what you are talking about there. And Russian privatized firms are more efficient that the old state-own firms, so that comment also puzzles me.

    I also disagree about British rail, at least according to the Economist magazine, the only failure was the actual track, the privatization of transport services was a success. Didn’t rail travel increase sharply after privatization?

    Lew, Excellent point.

  17. Gravatar of johnleemk johnleemk
    5. October 2010 at 07:53

    There is definitely a perception issue out there, I think, re privatization. The perception I see among people, based on stories in the media, is that privatized prisons abuse inmates and cost the state more. Likewise the only Brits I know who seem to have an opinion about their rail system aren’t fond of privatization. (Of course it seems possible, perhaps probable, that the silent majority are happier now than before with privatized rail — but the perception is still out there.)

  18. Gravatar of Matthew Yglesias » Sweden’s Vouchers Are Charter Schools Matthew Yglesias » Sweden’s Vouchers Are Charter Schools
    5. October 2010 at 09:57

    [...] Sumner, discussing Sweden, overlooks something that I find to be common when right-of-center Americans talk about Swedish [...]

  19. Gravatar of mbk mbk
    5. October 2010 at 10:15

    Lew,

    “The number of tax brackets isn’t the problem. It is all the other stuff in the tax code. ”

    Well obviously!! The complexity did not come from the brackets alone. My point was: Italy, not internationally renowned for government speed and efficiency, was able to reform 100+ page income tax filing loads incl. multiple brackets and multiple deductions, into something much much simpler, illustrated by but not limited to the simpler brackets. Thus it can be done.

    Income tax filing in Singapore is very simple and fast and typically done online, yet there are quite a few brackets. But very few deductions.

    Another way to simplify the filing is this: In some European countries, say Austria, wage tax is deducted at the source, and so are capital gains taxes on investment. This covers the income of much of the population. Filing for income tax is optional – it’s called “year-end tally” – and only done by people who have reason to believe that making the sums differently will save them tax through deductions. The average wage earner doesn’t bother.

    One advantage of fewer brackets should not be underestimated though: marginal income from further economic activities is much easier to estimate.

  20. Gravatar of OGT OGT
    5. October 2010 at 19:09

    Sumner- The fact that we have a number of elite universities says nothing about the average quality of our higher ed system, efficiency of the information exchange in college choice or the return for money invested.

    In fact, your higher ed point is, in my opinion, undercut by your response to the Mass results as there is no reliable measure that attempts to track educational attainment at higher ed institutions to say nothing of university value added as separate from the quality of the student inputs. And the educational institutions have put up a massive resistance campaign precisely to avoid any objective measure of their effectiveness.

    Basically, I think most of our worldwide university reputation is largely the result of US superpower status and elite research that is only weakly correlated to undergraduate education, in addition to the cream skimming effect.

    I brought up the Ram paper not to criticize the Swedish system, but to defend it from your criticism, and would have no problem seeing something similar implemented here, as Yglesias notes it’s basically a charter school system.

    Since MA has a population comparable to Sweden, Finland, or Singapore and the education system in the US is largely state driven it is legitimate to use it as a comparison. My point was actually that system design may be less determinant than debates like this pretend, which your response supported. Interestingly, though, no one seems to delve into the demographics when the school system they support come out on top. Funny that.

    BTW, I live in MA and have pre-school age child, so I am very well aware of the school district geography here. As well as the demography of the state. To the extent that parents do shop suburbs based on schools, it’s more or less by MCAS results, which indicate the sum total result of inputs but don’t directly indicate the effectiveness of school instruction.

  21. Gravatar of woupiestek woupiestek
    6. October 2010 at 10:43

    We have always had freedom of education here and the left has always been opposed to it. The one time they had a chance to make all school public, they choose universal suffrage instead; since then Christian parties have protected freedom of education. But they are steadily losing power and right wing opposition is growing because of Muslim schools.

  22. Gravatar of scott sumner scott sumner
    7. October 2010 at 05:45

    johnleemk, The media is of course reflexively anti-privatization. Many people think profit is a dirty word, so it is not surprised they are misinformed about things like private prisons.

    The dogs bark but the caravan moves on. There will be a massive amount of privatization all over the world in the next 20 years.

    mbk, Those are very good points. I didn’t know Austria was so progressive.

    OGT, I have friends who have taught at European universities, and they say that the system over there is all messed up.

    You said:

    “Since MA has a population comparable to Sweden, Finland, or Singapore and the education system in the US is largely state driven it is legitimate to use it as a comparison.”

    This is completely 100% wrong. Massachusetts is a very high tech state, with average productivity far higher than any other country in the world. It’s not even close. Your statement would be like saying the town of Wellesley is similar to Iowa because they’re both 98% white.

    I agree with you about how parents shop around here. MCAS is essentially measuring parent quality, and they want to be in a school system with other highly educated, high income parents.

    Woupiestek, Do all Dutch schools have to spend the same per pupil like all Swedish schools?

  23. Gravatar of 123 – TheMoneyDemand Blog 123 - TheMoneyDemand Blog
    7. October 2010 at 06:00

    Lithuania has got “Pupil’s basket” system for secondary education, this system covers approx. one half of systemwide secondary schooling expenditures and covers both public and private schools, there is a parliamentary debate to allocate all expenditures according to the voucher system. One year ago a similar reform was implemented for universities.

  24. Gravatar of OGT OGT
    7. October 2010 at 19:26

    Sumner- I think you’re largely misunderstanding my point with the Mass comparison. No one in the public discussion ever makes adjustments for demographic factors when comparing cross country scores, or states in the US, or under No Child Left Behind, or Private schools vs Public or MCAS scores. And the academic studies that do find little difference in value added based on system design.

    (They should make those adjustments all the time, including in higher ed! If only higher ed institutions would deign to be tested).

    Count me as underwhelmed by your defense of the US higher ed system. The trends in US higher ed for the last thirty years are steep and continuous increased costs per student in real dollars and compared to per capita income, grade inflation, and falling hours worked per student. But, “Trust us it could be worse!”

    BTW, this dialog on the overall MA test scores has actually made me more convinced that higher ed needs to be significantly reformed. I had never really thought about the compounding nature of human capital formation. Though I should have, since, of course, since I knew that parents with higher education attainment tend to have children who do too.

    Currently, higher ed acts like a positional good due to inefficient information exchanges with perverse incentives for institutions. So we have a fancy dorm tax, money losing graduate program tax, expensive student activities tax, and the like all slowing our human capital formation.

    Meanwhile much of that money would far better spent on improving early child education and quality daycare access. But, that’s a whole different discussion.

  25. Gravatar of woupiestek woupiestek
    8. October 2010 at 07:15

    The government pays the schools an amount per pupil that is higher if the parents have had lower education or have come from abroad. The school may ask for a contribution from the parents, but this is always voluntary.

    Two types of schools are financed this way: public schools and special schools. There are also private school outside of this system. Special schools have the right to deny pupils on religious basis. They hardly ever do this. However, starting this year they have an acceptation duty: schools have to accept pupils from parents that “respect the foundations of the school”.

  26. Gravatar of ssumner ssumner
    8. October 2010 at 14:50

    123, I am quite sure that vouchers are the wave of the future. The Swedes have found they are so popular that they can never go back. Imagine if we had always had free choice here, and then the government tried to stop it. There would be riots in the street.

    OGT, Many on the left strongly favor a heavy research emphasis in American higher ed. The government has poured billions into medical research etc. Now we can debate whether that makes sense, but research is the main thing driving up costs here, and explains why our universities lead the world.

    But I’m not trying to defend our entire university system, there IS too much public subsidy. I agree there is lots of waste. My point is that competition makes American universities more responsive to student needs than many European universities. My school would be far worse w/o competition, it affects everything we do. We are run almost like a business.

    Regarding early childhood programs, don’t studies show that Headstart doesn’t work? (After a few years the effects wear off.)

    Studies do show voucher schools outperform government schools. Yglesias once had a defense of public shools that cited a study showing they produced the same output as voucher schools, but at higher costs. AND THAT WAS A DEFENSE OF THE PUBLIC SCHOOL SYSTEM. Other studies show higher academic outcomes as well.

    Demographic factors are far less important when comparing various developed countries, than when comparing regions within a given country.

    Woupiestek, Allowing volunatry contributions from parents is a great idea.

  27. Gravatar of The age of the kilo-page « Phil Ebersole's Blog The age of the kilo-page « Phil Ebersole's Blog
    19. November 2010 at 13:17

    [...] came across the expression in the comment thread on a web log post entitled Scandinavian Simplicity by an economist named Scott Sumner.  Sumner makes the point that Sweden recently issued a [...]

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