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Business-Managed Democracy

“Business-managed democracies are those in which the political and cultural arrangements are managed in the interests of business”

Sharon Beder

Business-Managed Education

Vouchers in Practice



The first nation to widely implement a voucher system was Chile which established a national voucher system in 1981, during the Pinochet dictatorship. It covered all children and all schools, private and public. The voucher system led firstly to a drop in school funding through the 1980s as the real value of vouchers dropped and parental contributions didn’t keep up.

Secondly one in four students moved from public municipal schools to private schools between 1979 and 1994, leaving only 57 percent of primary students attending public schools, mainly the poorer students. Performance in standardised Spanish and maths tests for grade 4 students declined between 1982 and 1988 as school funding decreased.

Martin Carnoy concludes in his study of Chilean schools that “privatisation during the 1980s in Chile reduced the public effort to improve schooling since it relied on the free market to increase achievement”.

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Sweden introduced vouchers in 1992 as a way of improving education in the face of severe cost constraints and decreasing central government bureaucracy. Despite the vouchers most people remained committed to an equitable system of public education and few parents moved their children from neighbourhood schools – only about ten percent – and most of those merely moved their children to another municipal school.

The increase in private school enrolments was miminal – from 0.94 to 2.16 percent. Nevertheless the voucher system and devolution of fiscal control to schools was accompanied by cuts in school spending by the government, as in Chile.

The voucher system was discarded as a failure in 1996.

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In the US a voucher experiment by the Nixon administration, which began in 1972 in Alum Rock, California was abandoned in 1977 because there was no evidence that children in the program were achieving more.

The first state funded voucher program in the US was established in Milwaukee, Wisconsin in 1990.


In 2006 ten states and Washington DC offered either government funded vouchers for students to attend private schools or tax credits/deductions for private school tuition or contributions to private scholarship programs. However there is little evidence of performance gains and equity has suffered.

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