Category Archives: Education

Racism in America

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I. Introduction

In August of 2014, a police officer shot dead Michael Brown, a black teenager from Ferguson, Missouri, blowing the lid off a debate about racism in America. Protesters filled the streets, yelling “Hands up, don’t shoot.” The hashtag “#blacklivesmatter” began trending on Twitter. A few weeks before, bystanders filmed a police officer in Staten Island choking to death Eric Garner, an African-American man who’d been arrested for selling untaxed cigarettes. When the grand jury chose not to bring charges against the officers responsible for the deaths of Brown and Garner, many Americans sadly shook their heads.

This isn’t the first time the deaths of young black men have sparked a national conversation about race. In 2012, George Zimmerman shot and killed Trayvon Martin, an unarmed black teenager in Florida. On New Years Day in 2009, a police officer shot Oscar Grant, a 23 year-old black man, point blank while on top of him at Fruitvale Station in Oakland, California (a film was later made about his death). But unlike in those incidents, the conversation stemming from Ferguson has continued long past the shooting, in part due to a string of stories of overt racism around the country. In March of 2015, a video surfaced showing members of SAE, a fraternity at the University of Oklahoma, singing a racist song on a bus. The fraternity chapter was disbanded, the students expelled, and the national conversation about race and privilege continued.

These incidents are not unique, but are considered emblematic of a broader societal problem with racism in America. Police unfairly target people of color, filling prisons with blacks and hispanics and criminalizing generations of young people. In Ferguson and the communities around St. Louis, municipalities effectively run debtors prisons, jailing people for minor infractions like an expired tag or broken tail light. In 2013, Ferguson alone issued 32,975 arrest warrants for its 21,135 people, overwhelmingly to African-Americans. Clearly, there is a problem.

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Unfortunately, these incidents, and even the unjust policies they exposed, are symptoms of the much larger, more nefarious disease of institutional racism. Unlike the overt racism on display in the shooting of Michael Brown or the chants of drunk fraternity members in Oklahoma, institutional racism is not easily seen, measured, or even defined. It has no beginning or end, having permeated every aspect of our society, and its effects are felt all around us. Michael Brown’s death, like Trayvon Martin’s death and Eric Garner’s death, was the output of a system so deeply corrupted by institutional racism that outcomes like these are not only unsurprising, but expected.

In this essay, I will explain the concept of institutional racism, (try to) break down the components of the complex systems that govern society, and explain how institutional racism within those component parts creates a self-reinforcing, unjust system where ethnic minorities are discriminated against not only by individuals within the system, but by the system itself.

II. Unpacking Institutional Racism

It makes sense to start with a definition of institutional racism. From Wikipedia:

Institutional racism is the differential access to the goods, services, and opportunities of society. When the differential access becomes integral to institutions, it becomes common practice, making it difficult to rectify. Eventually, this racism dominates public bodies, private corporations, and public and private universities, and is reinforced by the actions of conformists and newcomers. Another difficulty in reducing institutionalized racism is that there is no sole, true identifiable perpetrator. When racism is built into the institution, it appears as the collective action of the population.

Institutional racism is a difficult concept to unpack because discrimination is rarely overt or entirely unjustified. It can be subtle and almost imperceptible at the individual level, and often stems from discrimination within another system. Let’s look at particular example and trace it back to the origins.

Institution 1: The Prison

Anthony is a 22 year-old African-American kid living in the Queensbridge Housing Projects in Queens, New York. He’s got a girlfriend and a two year-old baby boy, and has been selling drugs since he was a teenager. When he is arrested for selling a small amount of crack cocaine, he is sent to jail on $1,000 bail, which neither he nor his family can afford to pay, so he ends up staying in jail until his trial. Because he has a prior record, the odds are not in his favor when he finally gets his day in court.

Anthony has a one-in-three chance of going to prison.= during his lifetime.

Anthony has a one-in-three chance of going to prison during his lifetime.

In 2009, the incarceration rate of black males in the U.S. was six times that of whites. Is that because blacks are more likely to go to prison than white people? Perhaps. According a report from the Sentencing Project, white Americans overestimate the proportion of crime committed by people of color and tend to support more punitive measures even though they experience less crime. In Florida, a Washington Post poll found that whites believed 50% of crimes were committed by black people, when the real number is closer to 20%. This bias makes them more likely to support tough-on-crime policies, which politicians are more than willing to oblige.

new york prisonersAs a result, blacks are both more likely to be convicted of crimes and receive longer sentences than whites. Nationwide, blacks are 10 times more likely to go to jail for drug offenses. In 2012, a study found that blacks and Hispanics received longer sentences for the same or lesser offenses than white offenders.  People of color remain in prison longer and naturally comprise a larger percentage of the prison population.

If he could afford a lawyer, Anthony might receive a lighter sentence. But he can’t, so he is assigned an overworked public defender who might be meeting him for the first time on the day of his trial, and he appears before a judge wearing a jail uniform, since he couldn’t afford bail. Meanwhile, he’s been evicted from his apartment because he has been in jail, and his girlfriend and baby are staying at her mother’s house, while the primary breadwinner is sitting in jail, unable to work. With a few strikes against him, he receives two years and is sent to prison.

Anthony isn’t the only one dealing drugs in New York City, but this isn’t the first time he’s been arrested. The next questions is: why are so many blacks arrested in the first place?

Institution 2: The Police

Anthony hangs out on the corners and is frequently stopped by the police and searched. Because Queensbridge has a history of drug-dealing, there is a strong police presence in this overwhelmingly black and Latino neighborhood. People in the community have an uneasy relationship with the police, who simultaneously make the neighborhood safer and arrest young people in much higher numbers than in the rest of the city.

Part of the problem is that black males are unfairly targeted by police officers. In New York, a controversial policy called “stop-and-frisk” allows police to stop and question a pedestrian before searching them for guns and contraband. Despite the fact that blacks and Latinos make up 52.6% of the population, they consistently account for 85% of stop-and-frisk encounters. And, if they’re caught, blacks are four times more likely to be arrested for marijuana possession and selling, despite consuming the drug at largely same proportion as white people.

Stop-and-frisk has a notoriously low yield, subjecting thousands of innocent people to unnecessary searches.

Stop-and-frisk has a notoriously low yield, subjecting thousands of innocent people to unnecessary searches.

So it is true the police are overwhelmingly targeting people like Anthony, who was arrested in a stop-and-frisk encounter.  And the stats seem to support a pattern of profiling. New York City releases a report on race and crime statistics every year. In 2012, blacks and Hispanics accounted for 73% of arrestees for misdemeanor mischief, compared with 23% for whites. It is certainly possible, and even probable, that whites are getting away with more crimes than people of color. But blacks and Hispanics are, at the very least, getting caught more often.

The police argue that they’re job is to stop crimes, and arrest those who are committing them, whether they are black, white, or any other color.  When asked about racial bias in Ferguson, former NYC mayor Rudy Giuliani asked: “I find it very disappointing that you’re not discussing the fact that 93 percent of blacks in America are killed by other blacks.”  In a similar vein, responding to critics of stop-and-frisk, the NYPD released a report in mid-2012 showing that people of color made up 96% of shooting victims and 97% of shooting suspects during the first half of the year. The police commissioner, Raymond Kelly, defended stop-and-frisk as “proactive engagement”, calling it a “life-saving measure.” In other words, we’d arrest fewer black people if they committed fewer crimes.

Of course, these shooting suspects represent a tiny fraction of black and Latino youth in NYC, and hardly justify such a blunt policy. Still, given these realities, it is possible to see why police officers would target Anthony for reasons other than racial bias.

Institution 3: The City

Regardless of policy, Anthony was stopped because the police felt they had reason to suspect he may be engaged in illegal activity, so they approached him. But part of the problem is that Anthony lives in Queensbridge, a housing project with a pattern of gang violence and drug dealing. And that means cops approach kids in Queensbridge like Anthony all the time.

The concentration of violent crime around certain geographies has given rise to programs like predictive policing, which uses data analytics to identify crime hotspots and preemptively deploy resources to prevent crimes before they occur. Because those crimes are often committed in predominantly ethnic neighborhoods, police presence is higher and more people of color are arrested. The resulting higher arrest rates are not necessarily due to overt racial bias, but actually an analysis of where crimes are most likely to occur. And, in Anthony’s case, Queensbridge fits the bill.

Stops by neighborhood.  In the ten highest crime precincts, there are 16.9 stops per 100 residents - three times the city average (Source: NYT)

In the ten highest crime precincts, there are 16.9 stops per 100 residents – three times the city average (Source: NYT)

So why do specific urban neighborhoods like Queensbridge have such a problem with crime? Sociologists, criminologists, and economists have tried to answer that question for decades, and proposed several explanations. Conflict theory is one of the more prominent criminological explanations for the concentration of crime in certain neighborhoods:

As a general theory of criminal behavior, conflict theory proposes that crime is an inevitable consequence of the conflict which arises between competing groups within society. Such groups can be defined through a number of factors, including class, economic status, religion, language, ethnicity, race or any combination thereof.  Sociologists and criminologists emphasizing this aspect of social conflict argue that, in a competitive society in which there is an inequality in the distribution of goods, those groups with limited or restricted access to goods will be more likely to turn to crime. 

According to conflict criminology theory, people with fewer means are more likely to turn to crime to make ends meet. And, in a self-fulfilling way, crime begets crime – a fact that underlies the controversial broken windows theory of policing.

It is critical to note that poverty, not race, explains high levels of crime in this and just about every other theory of criminology. The link between poverty and crime is well-documented, going all the way back to Aristotle, who said, “Poverty is the parent of revolution and crime.” In a 2005 paper in the American Journal of Public Health titled “Social Anatomy of Racial and Ethnic Disparities in Violence”, three researchers from the Rand Corporation posit that the relationship between race and crime is based on underlying factors specific to racial groups:

Our theoretical framework does not view “race” or “ethnicity” as holding distinct scientific credibility as causes of violence. Rather, we argue they are markers for a constellation of external and malleable social contexts that are differentially allocated by racial and ethnic status in American society. We hypothesize that segregation by these social contexts in turn differentially exposes members of racial and ethnic minority groups to key violence-inducing or violence-protecting conditions.

The authors go on to offer a few statistically-significant examples of those social contexts, including marital status of parents, immigrant generation, and neighborhood characteristics associated with racial segregation. So, what exactly is it about these neighborhoods that help to explain the propensity to commit crimes?

Institution 4: The Neighborhood

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Nas in Queensbridge

Anthony’s neighborhood, Queensbridge, is the largest housing project in the borough of Queens in New York City. It was first built in 1939, and has around 6,500 residents at any given time. During the late 1950’s, the management converted it to a low-income housing project, transferring families with an annual income of more than $3,000/year, most of whom were white, to a middle-income project, leaving a predominantly poor black and Hispanic population.

Throughout the 70’s and 80’s, poverty increased, and Queensbridge became notorious for the prevalence of crime, gaining the dubious distinction of having the most murders of any project in New York in 1986. Queensbridge’s most famous resident, Nas, described growing up there in the song, “Memory Lane”, from one of your correspondent’s favorite albums, Illmatic:

My window faces shootouts, drug overdoses
Live amongst no roses, only the drama, for real
My pen taps the paper then my brain’s blank
I see dark streets, hustling brothers who keep the same rank
Pumping for something, some’ll prosper, some fail
Judges hanging niggas, uncorrect bails for direct sales
My intellect prevails from a hanging cross with nails

Things have changed from the days when Nas lived there. Since the 2000s, crime in Queensbridge, along with the rest of NYC, has decreased, but is still higher than in many places around the city. The median income today is between $21,000 and $25,000 a year, and the average rent is less than $500.

Queensbridge fits a common pattern of poor urban neighborhoods during the 20th century that has been well-researched by sociologists. In his 1987 book, The Truly Disadvantaged: The Inner City, The Underclass, and Public Policy, William Julius Wilson, a Harvard professor focused on urban communities, introduced the concept of “concentrated poverty” – a poverty incidence of 40% or greater, which has since become the de facto threshold for sociological research around urban ghettos. He argued that concentrated poverty creates “social isolation”, in which the community has fewer interactions with mainstream society, and, as a result, limited access to job networks and economic opportunities. With fewer opportunities to earn a living, people in poor communities are more likely to turn to crime as an alternative.

Share of the poor population living in neighborhoods with poverty rates of 40 percent of higher, 2008-2012. (Source: Brookings Institution)

Share of the poor population living in neighborhoods with poverty rates of 40 percent of higher, 2008-2012.
(Source: Brookings Institution)

According to Wilson, there are a number of reasons for the high proportion of blacks and Hispanics in communities marked by concentrated poverty. First and perhaps foremost to this discussion, overt systemic racial discrimination and segregation pushed more minorities into the inner cities:

Blacks were discriminated against far more severely in the early twentieth century than were the new white immigrants. Through restrictive covenants, municipal policies, and federal housing programs, blacks, unlike other immigrant groups, were forced into particular areas inner cities. At the same time blacks were discriminated far more severely than other groups in the labor market making them disproportionately poor and concentrated in low-paying jobs, particularly in the industrial sector. Collectively these forms of racial and spatial discrimination laid the basis for most areas of contemporary concentrated poverty.

Later on in the twentieth century, broad societal changes that I describe in another post, “The Convergence: America’s Long Arc of Development”, ushered in a period of de-industrialization, reducing the number of low-wage jobs available to blacks, while white flight and “spatial mismatch”, which describes the expanding geographic rift as economic growth shifted from the cities to the suburbs, all led to the further decline of urban ghettos.

This is exactly what happened to Queensbridge. The shift to a low-income housing project in the 50’s increased racial segregation in the community and declining socioeconomic conditions intensified, causing violent crime to increase. The escalation of the war on drugs during the Reagan Era only exacerbated the situation, and Queensbridge became a more dangerous place than ever.

The result for communities like Queensbridge is a decades-old poverty trap, in which social isolation and declining economic opportunities make it increasingly difficult for the overwhelmingly minority inhabitants to pull themselves out of poverty, creating a permanent underclass.  And for people like Anthony, fewer economic opportunities put pressure on them to support their families in other ways.  When drug dealing is ubiquitous in a community, it becomes an attractive proposition for someone without a lot of options.

Institution 5: The Schools

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The kids from Season 4 of The Wire.

Poverty does not only lead to more crime in neighborhoods like Queensbridge. It affects just about every institution that is built in and around the community. The Brookings Institution explains some of the other ramifications of concentrated poverty:

Poor individuals and families are not evenly distributed across communities or throughout the country. Instead, they tend to live near one another, clustering in certain neighborhoods and regions. This concentration of poverty results in higher crime rates, underperforming public schools, poor housing and health conditions, as well as limited access to private services and job opportunities.

We have covered higher crime rates and limited access to private services and job opportunities, so let’s turn our focus to the underperforming public schools. In the U.S., funding for public schools comes from local property taxes. As the poverty level creeps up, housing prices decline dramatically. According to one study, once the poverty level in a community exceeds 10%, housing and rental prices steeply decline until it reaches the 40% threshold of concentrated poverty, at which point prices level out.

Since property taxes are calculated using housing prices, schools in poor communities have fewer resources available than those in more affluent communities, where housing prices are higher. This systemic problem, coupled with limited job opportunities for high school graduates due to spatial mismatch, fewer mentors to provide positive guidance, and the high prevalence of crime in and around the schools, results in an inferior education for children in areas of concentrated poverty, leaving them ill-prepared to succeed, further widening the income divide and compounding socioeconomic inequality.

In New York City, spending on a pupil in a neighborhood with 30% poverty is 11% less than in one with very little poverty.

In New York City, spending on a pupil in a neighborhood with 30% poverty is 11% less than in one with very little poverty.

I have covered the tragedy of the American education system ad nauseum in this blog, and have discussed the importance of education for economic development in several posts. Without a decent education, generations of children born into poverty have few opportunities to break the cycle of poverty, keeping them ensnared in a vicious cycle of poverty that all too often ends with prison.

It is impossible to say whether a strong public school system would have set Anthony on a different path. But the purpose of education is to give children the tools to succeed and skills to find employment. Without a good education, the opportunities are limited.

III. Conclusion

Let’s take a step back and review the each of the institutions, starting at the beginning. Anthony is arrested, tried, and convicted of dealing drugs, after being stopped-and-frisked on a project corner. His neighborhood, Queensbridge, is poor and overwhelmingly black and Hispanic. The school system is underfunded, the community is isolated, and few economic opportunities exist for young people, increasing the likelihood that they join a gang, either to earn money from selling drugs or simply for protection. Anthony gets caught up in the life and goes to jail, leaving his girlfriend without a breadwinner and son without a father.

Systemic racism has a long history in America

Systemic racism has a long history in America

Now we can generalize his experience more broadly. Historical racial segregation and discrimination and the changing dynamics of the American economy led to concentrated poverty and increasing social isolation in urban ghettos, the majority of whose inhabitants are black and, more recently, Hispanic. Higher levels of poverty drive down housing prices, which deprive the community of property taxes, which creates an inferior school system for black children and prevents poor urban communities from improving.

Those inhabitants have fewer economic opportunities and are more likely to turn to crime as a way of making ends meet. Crime becomes increasingly concentrated in these communities, leading to a greater police presence and higher rates of arrest. Various factors, including generic racial bias, politicians’ fears of being labeled soft on crime, and the disproportionate media coverage of black criminality, leads to policies like mandatory sentencing that unfairly result in longer sentences for people of color. And all of these factors combined result in an incarceration rate of six times that of white people, which is right where we started.

The dog whistle that results in tough-on-crime policies

The dog whistle that results in tough-on-crime policies

In this essay, I have tried to break down the infinitely complex systems that govern individuals and highlight how systemic institutional racism pervades every aspect of society. This racism is not overt, and it is not sensational. It is not a white police officer shooting an unarmed black teenager and leaving him to die in the streets. It is not a bunch of white fraternity members chanting racial epithets on a bus. It is not spoken, nor is it perpetrated by any one individual. This racism is built into the very fabric of our society, creating a permanent underclass that is overwhelmingly black and Hispanic. And it is getting worse.

I don’t know the answer to this problem. I fear that it is so ingrained into our society that we cannot diagnose, much less eliminate, the disease. As a society, we must be be willing to engage in collective self-criticism that makes most people uncomfortable.  Whenever a politician tries to have an honest conversation about systemic racial inequality, they risk being labeled an apologist for America.  And, unfortunately, in every society, the underclass, despite having the numbers, rarely has the political influence or money to effect real pro-poor policies.

I welcome the discussion about race that the the events of the last year have forced America to have. But as long as we focus on the symptoms, rather than the disease, the problem will only continue to get worse.


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Do For-Profit Schools Give Low-Income Children A Real Choice?

At the opening of our school in Embu in May 2012

At the opening of our school in Embu in May 2012

Before reading this, please take a minute to donate to the Ravindra Ramrattan Memorial Fund.  Ravi was killed in the terrorist attack at Westgate Mall in Nairobi on September 21st.  You can read about his story on this blog.  

Bridge International Academies, a chain of low-cost private primary schools based in Nairobi, Kenya, was the subject of a recent episode of All Things Considered on NPR.  I would encourage you to listen to it in full, as the cofounder and my old boss, Shannon May, does a great job of explaining the philosophy of Bridge. The radio segment and accompanying blog post discuss the Bridge model, and highlight a few common criticisms.  Here is one:

“If somebody suggested that kind of an educational model, in this country they would be laughed out of the educational community,” says Ed Gragert, the U.S. director of the Global Campaign for Education, which advocates for increased access to education in the developing world.

“That’s not how kids learn best,” he says. “Kids learn by interacting with each other. It seems like we are going back for the sake of somebody making a profit to where a robot could teach that class.”

I worked as a business analyst with Bridge for a year, where I was responsible for all things data, including longitudinal student performance testing, marketing analytics, and a whole lot of one-off projects.  When I left the company in May 2012, I wrote a five-part post discussing my thoughts on Bridge and its model. Given that I wrote the post 18 months ago, some of the processes, data, and technologies I describe may be a bit dated.  For example, Bridge hadn’t yet rolled out e-readers and was just starting to utilize the smartphone application.

I am reproducing the unedited post here in full.  At the end, I’ve added an updated conclusion that gives my thoughts on the criticisms raised in the NPR segment, and my thoughts on Bridge and the state of education today.


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I. The model

After six months learning about agriculture in West Africa and working on a project whose objective was to improve the private sector, I decided to return to the private sector, since the public sector was not very good at making it any better.  I had interviewed with the Acumen Fund for its global fellowship in Nairobi six months prior.  I knew a few folks through my Kiva connections, and began networking for jobs there.  I cold-emailed a few, hit up friends for introductions, and stumbled into an informational interview with Jay, the founder of Bridge International Academies, through a former Kiva Fellow in Benin.  When I told him I was trying to move to Kenya four months later, he said “let’s meet when you get here.”

So, when I got there – actually, 10 hours after I got there – I met with him to discuss the prospect of me working with the company.  The company, as a background, is a chain of low-cost private primary schools serving the slums and low-income communities in Kenya.  When I met him in January, they had just opened their 20th school.  When I met him again in May, they were at 25 schools.  When I left two weeks ago, Bridge had 75 schools throughout Kenya, and is planning on opening another 200 by the end of 2013.

The model is as simple as it is elegant.  Bridge is creating a “school in a box” – a highly standardized, systematized, and replicable model for an individual school, where everything, from the curriculum to the training to the school operations, is designed for scale.  The process begins with market due diligence, where a team of research associates interview 40 households in each community where we are considering opening a school.  We survey the parents to determine whether there is a market for one of our schools.  For the last four months, I worked with the research team, developing an algorithm to predict the size and profitability of each new school, allowing us to determine how much we need to pay for land, how many classrooms we need to build, etc.   I redesigned our research report and, using our enrollment figures from this year, created a rubric based on population density, market size, cost-competitiveness, and the number of competing schools, which gives us a fairly accurate projection of how a school in that community will do.

Once we have approved a community, we scout for suitable plots and negotiate for the land.  Our construction team builds the school, and our training department ensures that teachers are trained and ready to teach by the time our school opens.  The curriculum team – which consists of 40 Kenyan and American educators – script every minute of every lesson, from math to English to science to Kiswahili, which is then delivered to the students by the teachers.  The incentive structure for school managers is based on the number of students they attract to their school, while the teachers are given bonuses based on performance.  All problems at the school – from teacher complaints to requests for water or desks – are routed through an in-house call center, which also makes outgoing calls to schools and teachers to ensure that the ship is running smoothly.  Lastly, the IT department has designed a billing system that allows parents to pay with M-PESA, and a school-management Android smart-phone application that automates much of the payment and performance monitoring at the school level.  All in all, it is a remarkable model.

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II. Why is Bridge successful?

I think that one of the reasons that Bridge has been so successful at innovating has been its willingness to bring in a multidisciplinary team to run the show.  People like me, who have no background in education, but a good deal of experience in other areas, bring fresh ideas to an industry that, apart from certain ed-tech companies and charter schools like KIPP, is not known for innovation.  Our head of operations was the former director of business development for Dominoes Pizza in Asia, responsible for introducing the retail chain to a completely new market.  The founders include one successful tech entrepreneur, a division lead at IDEO, the design firm, and an anthropology PhD.  It doesn’t get much more interdisciplinary than that.

Another reason I think it has seen success where others like it have seen failure is that it refuses to accept excuses for poor performance on the part of its employees and vendors, and sees itself first and foremost as service provider that puts its customer first.  As a generality, business in Africa moves more slowly and expectations are sometimes different.  The business culture – with many notable exceptions – is such that the customer is never at the top of the priority list.  The other day, a coworker told me that a vendor to whom we paid a lot of money to perform a service which he performed poorly – was upset that the management was too busy to see him.  “This is an outrage – I am a client,” he said.  The fact that we were, in fact, the client and he the service provider undoubtedly never crossed his mind.

Bridge demands quality from it suppliers, timeliness from its vendors, and results from its employees.  This mentality ensures that the best people for the job are in place, and they can perform their jobs efficiently.  In the NGO world (or at least the ones I have seen), this approach to doing business is hardly, if ever, the norm.   If a deadline is missed, people say “what can we do – it’s Africa time.” Or an NGO holds a conference that only attracts participants for the per diems and lunch provided.  Accountability is not part of the lexicon.  At Bridge, on the other hand, if a vendor screws up the logo on the 1,000 shirts it ordered, it refuses to pay until the mistake is corrected.  It’s only business.

That is because Bridge, above all else, is a business.  It happens to be building low-cost primary schools in slums, but it is first and foremost a profit-oriented enterprise.  If Bridge is going to reach 1,000 schools and one million children in countries around the world, it has to be laser-focused on the bottom-line to succeed.  Drawing from a talented pool of private sector veterans and a founder who started and sold a company in his twenties, Bridge understands this well.

This kind of truly business-minded approach to development is rare, even within the relatively new and trendy industry calling itself “social enterprise.” While many social enterprises – companies that try to turn a profit while doing good – struggle to balance the demands of a double bottom-line, Bridge has create a model where the profit motive is inseparable from the social mission – one cannot exist without the other.  If Bridge students perform poorly on the KCPE exam – the test culminating primary education in Kenya – parents will pull their kids from Bridge schools en masse.  On the other hand, if they perform better than students at other schools, Bridge schools will double in size in a day.

That is because poor parents, just like middle- and upper-income parents, are discerning consumers when it comes to education.  They look for quality and, more importantly, value for the little money they have.  This is generally true for most products and services, but particularly so for education, which parents see as a means of getting out of the slums.  For Bridge to grow, it must be educating its students better than the alternatives in the community – either government schools or other non-formal schools.  In this case, it means ensuring that we outperform other schools – both government and other non-formal schools.

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III. The academic foundation of the concept

The Bridge model is a fundamentally libertarian idea.  It is premised on the belief that school choice is a good thing.  Many organizations, including many establishment development titans, believe that education should be a public good, provided free by the government.  This may be true in theory, but, like most development theories, it is rarely true in practice.

For example, Kenya already technically has a free primary education system, where all students, regardless of socioeconomic status, are guaranteed the right to an education at no cost.  Yet, in the slums, where the houses are built illegally, few government schools exist to serve the communities.  And even in areas where public schools do exist, additional fees payable to the head teacher and others mean that parents are paying almost as much for school as they do at Bridge.  Outside of Nairobi, many of the government schools are as close to free as a school can get in Kenya, but they are often overcrowded, far away, and staffed by complacent teachers who are either overburdened with too many students or complacent when it comes to teaching.

Much of the free primary education system in Kenya was subsidized by foreign donors.  But these donors eventually decided to scale back funding after massive corruption scandals were exposed.  In the main Kenyan daily newspaper, the Daily Nation, every day exposes a new corruption scandal.  Needless to say, the state of the government education system is underwhelming at best.

Because of the failures of the government system, thousands of non-formal schools have sprung up throughout the slums to serve these communities.  Education entrepreneurs, churches, NGOs, and other groups build and operate schools to fill the void left by poor state-run education.  While the Global Campaign for Education and others would like to believe that these schools do not exist, they are everywhere.

When people speak and write about Bridge, they credit the company with a radical new approach to education, offering private education as a means of providing quality education.  But Bridge is hardly innovative in this respect.  Non-formal schools like Bridge have existed for decades.  It was not until the early 2000’s that a British academic named James Tooley began seriously researching education in the slums of India, Nigeria, Ghana, Kenya, and other countries, and finding bustling schools with hard-working teachers.  He published a book called The Beautiful Tree and several articles for the Cato Institute detailing his findings, which were influential in seeding the idea for Bridge.

Rather, the real innovation Bridge brings to this sector is its relentless pursuit of efficiency gains and systematization of the day-to-day running of a school.  Technology as a means of creating scalable payment and performance monitoring systems, a scripted curriculum written by subject-matter experts, modular school construction using low-cost materials – these are all key innovations that have the potential to revolutionize this sector.  But the concept of a low-cost private primary school for the poor is nothing new.

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IV. The criticisms of Bridge

The first and most obvious criticism of the Bridge model of education is that a scripted curriculum creates a non-dynamic learning environment for children.  The western model of education is premised on the idea that critical thinking is essential to success.  The very idea of a liberal arts education is a distinctly Western concept.   So, naturally, when people hear that our teachers are high school graduates who are taught to teach by reading to children from a script, they automatically assume that the quality of the education is poor.

It is true that the standard of education at a Bridge school is going to be far below that of more expensive schools.  But when compared with the alternatives – which include government schools staffed by often unmotivated teachers and other non-formal schools offering little in-house teacher training – Bridge offers an education that is subject to rigorous testing and review.  For example, our curriculum is written by a team of Kenyan education professionals and Teach for America alumni, many of whom have Masters Degrees in education.  It has a video team that films lessons to be reviewed by the curriculum writers.  They look for level of engagement among the students and adjust the approach to maximize comprehension and retention.  Student exams are digitized and reviewed both to identify weaknesses in the curriculum, but also review teacher performance.  Lastly, the school managers audit the teachers on a regular basis to ensuring that they are performing adequately.

Lastly, and most importantly, Bridge undertakes a rigorous longitudinal testing study of 5,000 students every six months to monitor improvements in reading and math.  Using a test developed by the Research Triangle Institute and USAID called the Early Grade Reading Assessment and Early Grade Math Assessment (EGRA / EGMA), Bridge compares the performance of 3,000 of its own students with that of 1,000 students at government and other non-formal schools.  The results, which are shown on the website, show strong performance gains in basic reading skills, compared with its peers and less strong, but still measurable, gains in math.  I know this because I was responsible for leading this student testing and performing the analysis.  Using this data we can then tailor our curriculum to address our problem areas and improve the curriculum.

This level of analytical rigor is simply not possible at other non-formal schools.  Why?  Because Bridge is able to leverage economies of scale.  It can invest huge amounts of resources into improving its model because it knows that all changes can easily be rolled out across every single school in a day.  When I first met Jay in January 2011, Bridge had just broken 10 schools and opened its first school outside Nairobi.  By the time I left, the company had 73 schools across Kenya.

This level of growth means two things.  First, since the unit economics are such that each individual school is profitable at a relatively small size, more schools mean additional revenue that can be poured back into the company.  And second, any major policy changes can be backed with incredibly rich data sets.  As the company’s business analyst, I was working with datasets with sample sizes in the tens of thousands.  For someone trying to use data to better understand how our parents think, pay, and act, and understand what makes a good school, I was in heaven.

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V. How Bridge uses data to perfect the model

In the last post, I talked about how Bridge is able to leverage its economies of scale to both utilize huge amounts of data to make decisions and, once those decisions are made, they can be rolled out en masse.  I will give a few concrete examples of how this works in practice.

Last September, we wanted to see whether offering a free month of school and having a grand opening ceremony with a bouncy castle would boost enrollment.  So we did what most respectable startups exploring a new product or market would do: we tested it.  Of the nine schools we opened last September, four had a grand opening ceremony (GOC) and first month free (FMF), two had only FMF, one had only GOC, and two had neither.  When I looked at the numbers, the results were amazing.  Not only was initial enrollment nearly three times what we had experienced in the past, but the conversion rate – the most important factor in measuring the efficacy of a marketing promotion in retail – was 85%.  This is practically unheard of in retail.  In other words, 85% of people tried the product and decided to buy it.  When was the last time you started paying after the free trial expired?

When I shared the results with the management team, the action was relatively decisive.  With the 30 January-2012 schools scheduled to be opened in only eight weeks, they changed everything.  Effective as soon as possible, every new school would have a grand opening ceremony and every new student would be given a free month of school.  And, to make it fair, all 60 schools would have a GOC in January and every student would receive January free.   One by one, the managers detailed what needed to be done and set to work.

The IT team began making changes to the billing system and the smartphone application; the training team began prepping the training facilitators to communicate the new policy, and the operations team went out to each school to explain the changes directly.  Marketing began contacting companies that rent bouncy castles and negotiating prices, while government relations reached out to the elders in the community and invited them to attend as “Friends of the Academy.” Within 24 hours of my sharing the analysis, the company began preparing for a monumental change in the way things were done.  In January 2011, our largest school opened with 200 students.  In January 2012, the biggest had more than 700.

For me, the policy change had even greater implications.  Since each cohort of schools opened with different policies, regulations, and circumstances, it was difficult to isolate determinants of performance without introducing incredible amounts of bias.  But now, every school had a grand opening ceremony and January became a free month for every single student.  Therefore, the maximum attendance in January effectively equalized every school and made them as close to comparable as they would ever get.  Now, all of a sudden, we were able to actually measure how factors like population density, school location, cost competitiveness, income levels, urban/rural, and relative importance of education in the community influence school size and profitability.

Example of a regression model built to predict enrollment.

Example of a regression model built to predict enrollment.

From our market research, we had hundreds of consistent variables about each community.   So I built a massive Excel model and ran some basic correlation analyses and scatter plots to identify the most important factors in determining where to open a school.  Based on the analysis, I created an algorithm to actually project the size of the school after one year that was accurate within a range of 100 students at 80% of schools.  We automated the report creation and incorporated a profitability model into each one, which would dictate land price and school size.  And, just like everything else at Bridge, once we had it right, the new report became part of the Bridge model, and is there to stay until the data proves it wrong.

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VI: Updated conclusion from November 2013

I feel largely the same way about Bridge today as I did back in 2012 when I left to return to the U.S.  I still believe it is a revolutionary idea that has the potential to re-define how companies serve the poorest segments of the population around the world.  It’s laser-focus on scalability and and its systems-orientation have made it a model for other burgeoning social enterprises, and not just in education. A standardized approach designed for replication has applications in healthcare (see Penda Health), water and sanitation (see Sanergy), agriculture (see One Acre Fund), and other sectors.

Bridge has strong partners in its investors and has some very talented individuals leading different segments of the company.  If it is successful, it has the potential to prove out the social enterprise model as a viable approach to economic development.  In doing so, it would open up funding for similar companies around the world.

And perhaps most importantly – at least to me – it has the potential to prove that the conventional wisdom can and should be challenged.  When James Tooley and others first began advocating for private schools in the slums and talking about charging poor families for an education, he was lambasted by the education establishment for trying to charge for what they considered to be a public good.  But over time, people came to realize that theory does not always jive with the realities of the situation on the ground.

In the specific case of Ed Gragert, the man criticizing the model in the NPR piece, he should go to Mathare, Kawangware, or any of the other slums where Bridge schools are located and visit the schools in the area. Before passing judgment, he should look at the alternatives and judge for himself whether Bridge offers a decent education relative to other schools. He should think about the availability of talented teachers in the communities where Bridge builds schools, and look at the incredibly rigorous screening process they use to identify the best candidates in the community.  Because then, he would realize that what people would say about a school like Bridge in the U.S. means next to nothing.  If there is one thing I learned during my years working in international development, it is that context is key.

In reality, Bridge – like many of the innovations in Africa – is far ahead of the curve of the U.S. education system.  Contrary to Mr. Gragert’s assumption that a person would be laughed out of the room for proposing a Bridge-like model, the arc of education is bending closer to the Bridge model than he would like.  MOOCs, Khan Academy, “flip teaching” and the entire blended learning model are an attempt to leverage economies of scale and domain expertise to improve the quality of education in the U.S.  Because Bridge is deeply constrained by a lack of resources, it is required to innovate in ways American educators do not.

For example, the scripted curriculum allows Bridge to thrive in the absence of a robust higher education infrastructure in low-income areas of Kenya. If they can leverage the expertise of skilled educators, Bridge teachers can focus on controlling the classroom and ensuring the students are at least reasonably engaged.  Without electricity or Internet, Bridge schools cannot simply project Khan Academy lessons.  So, in reality, the e-readers are an ingenious way of delivering world-class lessons without the resources of an American classroom.  These innovations may seem trivial, but, in reality, are quite ahead of their time.

So, a year and a half later, I feel the same way about Bridge that I did when I finished working there back in 2012.  I wish them all the best in their expansion to Nigeria, and can’t wait to see what they do in the future.


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M-Prep: Democratizing Education Achievement


Help M-Prep, friends of Develop Economies and cool social enterprise, get to the Unreasonable Institute by supporting them!

Anyone who has worked in the education sector in Kenya knows about an exam called the KCPE.  It stands for Kenya Certificate of Primary Education, and it is the most important exam for not only students, but also teachers, school owners, and just about anyone involved in primary education in the country.

Students take the exam during their final year of primary school.  It lasts four days and tests students’ knowledge in basic subjects taught in primary school.  Most importantly, the test determines which secondary schools students will be eligible to attend.  Unfortunately, for many students, secondary school is not actually an option, since only primary education is free and many poor families cannot afford the fees.  Nonetheless, the KCPE exam, to many, is a gateway to success and vehicle for economic mobility.  Because of the disproportionate importance placed on the exam, the time when KCPE scores are released is always fraught with tension.

When I worked at Bridge International Academies, I often had discussions with coworkers about the KCPE exam.  During my time in Kenya in 2011 and 2012, Bridge only offered up to class 4 and 5.  The KCPE exam, which takes place at the end of class 8, was far enough in our future that it would not necessarily pre-occupy parents who were considering sending their kids to a Bridge academy.  But once those children reach class 8, parents in the communities we serve will be closely watching the results of the KCPE exam.

Unfortunately, such a system is fraught with inherent inequality.  Students attending overcrowded and under-resourced schools are naturally at a disadvantage in preparing for the KCPE exam.  It serves as a further barrier to socioeconomic mobility, where poor students will never be able to compete on the same level.  And that is where M-Prep comes in.

Now, just for full disclosure, I know the founder of M-Prep, Toni Maraviglia, from my time in Nairobi.  We briefly worked together at Bridge, where she developed the school manager and teacher training materials.  A Teach for America alum, business school dropout, and true social entrepreneur, Toni discovered while developing an education program in rural Western Kenya that, despite the best efforts of teachers, students lacked access to adequate test prep materials and, as a result, were struggling with the KCPE exam.  Fortunately, with mobile penetration at more than 70%, cell phones offer an ideal platform for disseminating material to students studying for the KCPE exam.  Here is an overview of the problem, and how it works:

In Kenya there are currently 9 million students registered in primary school and less than half of those students pass their primary school exit exam. We’re talking about 5 million kids who do not receive a basic education, 5 million kids with few options for career paths. Most become subsistence farmers or slum laborers; some even become criminals. The poverty cycle continues. Limited study materials exist, but all are low quality or too expensive. Additionally, teachers are overburdened by crowded classroom of 40-80 students and cannot give individualized feedback to students. Most importantly, little interaction exists among educational stakeholders – teachers, parents, schools, and students – and often, nuanced data is nonexistent until a student fails. These stakeholders don’t know what students need to do to improve until it’s too late. If information were widely available and learning was high-quality, accessible, and fun, far fewer students would fail.

MPrep helps kids learn, review, compete and collaborate through accessible and fun mobile applications. We also give teachers data about their students and help parents stay informed – all on simple mobile tech. Basically, we make it easy and fun for an educational community to communicate and share information.

It is a massively scalable model, and they have already made inroads with many school districts.  Parents love the fact that their kids are receiving extra tutoring, and the kids find the product interactive and fun.  Teachers and school headmasters appreciate the fact that they kids are gaining an advantage, which not only translates into prestige for the school, but also real dollars.  Schools that have higher than average KCPE scores are hugely popular, and frequently see a big jump in enrollment.  And, in the latest round of KCPE testing, M-Prep saw real results:

The Head Teacher of Malanga Primary, a school way out near Kisumu said, “Our pupils have improved from a 210 to a 234 averageand we attribute this growth to MPrep. Thank you.” The Head Teacher then told our Sales Manager, Peter Sereti, that they’d like to renew their MPrep data subscription.

The Head Teacher of Muthurwa expressed the same. Their scores jumped from a 199 average in 2011 to 230 in 2012.

M-Prep has a great model that has the potential to effect real change in the primary education system not only in Kenya, but really anywhere where people have access to cell phones.

Now, they are trying to get into the Unreasonable Institute, an accelerator and incubator for social enterprises that offers access to funding, mentors, and a network of other entrepreneurs who are making a difference.  So please support them.


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The Problem of Rural Education in the Philippines

Note: The following post is from March 2, 2010.  I posted it on my original blog, joshweinstein.wordpress.com, and is, for some reason, popular among people doing research on education in the Philippines.  In the hopes of directing some of that traffic toward this site, I am re-posting it here.

In this journal, I have discussed the relationship between education, poverty alleviation, and economic development. The link is critical and the three are self-reinforcing.  Education (and the premier prep courses for the EA exam in particular) creates greater opportunities for the youth, who go on to work decent jobs in cities like Bacolod, Manila, and Cebu.  The children remit money back to the parents, who spend on home improvements and the tuition fees for the younger siblings.  College-educated individuals are much less likely to end up impoverished (about 1 in 44).  Trade schools also create opportunities, with only one in 10 people with post-secondary degrees living below the poverty line.  Unfortunately, the ratios drop precipitously after that.  One in three high school graduates and half of elementary school grads are impoverished.  Here are the sobering education statistics:

The long-term outlook for poverty reduction doesn’t look good either, unfortunately. We all know that there is a very strong link between education (or lack of education) and poverty—two-thirds of our poor families have household heads whose highest educational attainment is at most Grade 6. Well, the education statistics (all from the NSCB ) tell a very sad tale: elementary school net participation rates (NPR)—the proportion of the number of enrollees 7-12 years old to population 7-12 years old—have plummeted from 95 percent in school year (SY) 1997-98 to 74 percent in 2005-2006, as have high school NPRs.

Cohort survival rates (CSR) have also dropped: Out of every 100 children who enter Grade 1, only 63 will reach Grade 6, down from 69 children in 1997-1998. In high school, CSR have dropped even more: from 71 to 55. Which means, of course, that school dropout rates have increased. Which is one of the reasons why, in 2005-2006, for the first time in 35 years, total enrollment decreased in both elementary and high school: although private school enrollment increased, public school enrollment went down more.

The correlation is not difficult to see, but fixing the problem presents a challenge for several reasons.  According to some observers, the Department of Education Culture and Sports (DECS) in the Philippines is one of the most corrupt government entities in the country.  It has a budget equal to 12% of spending, but is riddled with graft from procurement (buying textbooks and other supplies), grease money, and bribes for just about any sort of movement within the bureaucracy.  The impact on the education system is detrimental:

Embezzlement, nepotism, influence peddling, fraud and other types of corruption also flourish. Corruption has become so institutionalized that payoffs have become the lubricant that makes the education bureaucracy run smoothly. The result: an entire generation of Filipino students robbed of their right to a good education.

This corruption leads to poor allocation of resources.  Teachers are underpaid and treated poorly.  In 2005, the Philippine government spent just $138 per student, compared to $852 in Thailand, another developing country in Southeast Asia.  But graft and corruption are not the only issues.  Poverty is a vicious cycle that leads traps generations of families.

About 80% of the Filipino poor live in the rural areas of the country.  These are towns located deep in the mountains and the rice fields.  The population density in the rural parts of the country is low, and there is a corresponding deficiency in schools and classrooms.  Public school is free, but families still cannot afford to send their children for a complicated network of reasons.  In this editorial for the Pinoy Press, one author delineates the key issue:

With around 65 million Filipinos or about 80 percent of the population trying to survive on P96 ($2) or less per day, how can a family afford the school uniforms, the transportation to and from school, the expenses for school supplies and projects, the miscellaneous expenses, and the food for the studying sibling? More than this, with the worsening unemployment problem and poverty situation, each member of the family is being expected to contribute to the family income. Most, if not all, out-of-school children are on the streets begging, selling cigarettes, candies, garlands, and assorted foodstuffs or things, or doing odd jobs.

Beyond the selling goods on the street, children in farming families are expected to work in the fields during harvest time.  In agriculture-based communities where farming is the primary livelihood, having children around to help with the work means more income for the family.  In a recent trip to Valladolid, someone told me that children are paid 15 pesos for a day’s work in the blistering heat.  They are pulled from school for two or three months at a time and are irreparably disadvantaged compared with their classmates.  So, they may have to repeat the grade, only to be pulled out of school again next year.

Transportation is another big problem.  Kids walk 2-3 kilometers or more to and from school every day.  They have to cross rivers and climb hills with their bookbags.  The ones that can afford it take a tricycle, but that is a luxury.  Schools are sometimes too far for the most remote communities to practically access.  So the families can’t afford to pay and the children are pulled from school.

It seems like an intractable problem.  Corruption in the education bureaucracy and a lack of resources make delivering a high-quality education to all Filipinos a challenge.  Microfinance is one way to help.  With the assistance of microcredit loans, women can pay for the education of their children – to purchase uniforms, textbooks, lunches, and rides to school.  Also, by creating another source of income other than farming, the children do not have to come help the family work the fields.  When I talk to NWTF clients about their dreams, they unfailingly say they hope for their children to “finish their studies.” History has shown that it is an achievable goal.  But real systemic change needs to come from above.  As long as corruption and bureaucracy paralyzes the system, the goal of delivering a decent education to children – which pays dividends to the country in the long run – will remain out of reach.

For the rural poor, non-profits exist to help in the mission of education.  While looking up pictures for this post, I came across a Filipino organization called the Gamot Cogon (“Grass Roots”) Institute:

The Gamot Cogon Institute (a non-stock, non-profit organization) is an Iloilo-based cultural institution working to transform society through human development approaches including education and training. GCI also prototypes or demonstrates alternative approaches to education, agriculture, health, and full human development.

Very cool stuff.


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The Promise of Social Impact Bonds

Over the past few weeks, social impact bonds have received a lot of attention.  That is because New York City has partnered with Goldman Sachs to run a pilot program aimed at reducing recidivism among inmates at Rikers Island prison.  But first, a little background on social impact bonds.

There are many social problems for which there is no clear-cut solution.  Homelessness, foster care, inmate recidivism, and other issues are often expensive to control.  Programs designed to address them are often part of large bureaucracies and susceptible to the same inefficiencies and perverse incentives endemic in other government agencies.  And, despite best efforts to fix the problems, they will only get worse as social programs move closer to the chopping block.

Non-profits supplement government efforts by addressing specific problems.  Halfway houses, community health clinics, shelters, low-income housing developments, and soup kitchens are all examples of non-governmental organizations serving the homeless.  Many have developed innovative approaches that are effective in achieving specific goals – i.e. placing homeless in low-income housing, job-training, etc. – but are constrained by a lack of capital.  Without access to greater resources, non-profits will never be able achieve scale.

So the government has lots of money, but not enough dynamic programs to fund.  In contrast, non-profits run effective programs on a small scale, but lack the money to expand.  This is where social impact bonds come in.

In a social impact bond, the government contracts an intermediary to put together a social impact bond to address a specific social problem.  The intermediary then identifies non-profits with promising potential and connects them with investors.  The investors provide multi-year funding to the non-profit, allowing them to scale their intervention.  In return, the investor is reimbursed by the government based to the program’s success.  A monitoring-and-evaluation firm is brought in to assess the impact, which is based on a pre-determined set of metrics.  If the intervention achieves the targets, the investor makes a return on the bond.  If not, it takes a loss.

The best way to explain the mechanics of a social impact bond is to provide a real-world example.  In the case of New York City and Goldman Sachs, the city government wants to reduce the number of repeat offenders, which cost taxpayers money in the form of prison costs, increased law enforcement, and lost productivity.  Here is how it works:

The Goldman money will be used to pay MDRC, a social services provider, to design and oversee the program. If the program reduces recidivism by 10 percent, Goldman would be repaid the full $9.6 million; if recidivism drops more, Goldman could make as much as $2.1 million in profit; if recidivism does not drop by at least 10 percent, Goldman would lose as much as $2.4 million.

It seems like a win-win situation, if investors see social impact bonds as a viable means of earning a financial return.  I am mostly in favor of any programs that place greater emphasis on “outcomes over outputs.” But this emphasis is hardly new in the international development community, which has seen a surge in rigorous testing for interventions after economists like Dean Karlan, Esther Duflo, and Abhijit Banerjee popularized the use of randomized controlled trials (RCTs) to determine the efficacy of different approaches.  And I have the same concerns about social impact bonds that I do about RCTs.

Tying financial returns to outcomes creates two potential problems.  First, it risks incentivizing the wrong things, a la “teaching to the test.” Often, these problems are extraordinarily complex and difficult to address, and rarely lend themselves to a timeline that works with an investment.  In microfinance, for example, most RCTs occur over 2-3 years, and have shown little improvement in the well-being of recipients.  I would argue it takes much longer than 2-3 years to realize the fruits of microfinance.  If that is the case, which timeline will be used for the social impact bond – the one that shows progress, or the one that doesn’t?

For some issues, this is not a concern.  Recidivism, for example, is cut-and-dry.  Chronic homelessness, however, is not.  For social impact bonds to be successful, they will require metrics that truly reflect the success of the program.

The second problem is that the interconnectedness of institutions can mask success.  Mark Rosenman of Caring to Change explains both of these problems (h/t Democracy in America):

Where does a nonprofit get the funding to provide the services from which they are to later show a monetized gain to government? How far out in time does the performance metric need to go before quantifiable economic value can be shown and the charity repaid its expenditures? What happens when a nonprofit is providing superb and highly effective services to individuals, but other institutions and variables deteriorate and affect its outcomes?

These are very real concerns that the international development community has been forced to confront (or avoid) in its work.

I am not as pessimistic as Mr. Rosenman or Mr. Steinglass.  I think that social impact bonds are a pragmatic and innovative solution to a very real problem.  In addition to capital, investors will bring human resources and technology to bear on the problem, which will infuse the sector with new ideas and perspectives.  Social impact bonds are still in their nascent stages, but, if they can figure out a way to effectively capture success rates and avoid the pitfalls of “juking the stats,” I see no reason why they can’t be a game-changer in the fight to address social problems.


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Why Poverty Persists in America, pt. 1

There are four reasons, says Peter Edelman, author of “So Rich, So Poor: Why It’s So Hard to End Poverty in America”:

With all of that, why have we not achieved more? Four reasons: An astonishing number of people work at low-wage jobs. Plus, many more households are headed now by a single parent, making it difficult for them to earn a living income from the jobs that are typically available. The near disappearance of cash assistance for low-income mothers and children — i.e., welfare — in much of the country plays a contributing role, too. And persistent issues of race and gender mean higher poverty among minorities and families headed by single mothers.

In the wake of the recession, with so many people currently unemployed, the poverty level in the U.S. continues to grow.  And, while Edelman’s diagnosis is right, the fixes for at least some of the problems seem more difficult.  The number of low-wage jobs in America reflects the spread of globalization and the movement of jobs overseas.  This process has been ongoing for several decades, as manufacturing steadily moved abroad and, increasingly service industries, like call centers and business process outsourcing, followed suit.  Ironically, America’s loss became the developing world’s gain, as hundreds of millions of people climbed above the poverty line in places like China, India, Brazil, and the Philippines.  On a global scale, the trend toward low-wage jobs in the United States may actually reflect a global poverty reduction trend.

Still, working a low-wage job in the U.S. is no doubt difficult.  More than 100 million people – nearly a third of the population – live below twice the poverty line ($38,000 for a family of three).  Edelman says that this trend has been ongoing since the 80’s, but we only opened our eyes after the recession.  This is true, but doesn’t tell the whole story.  Amidst one of the longest, deepest recessions since the Great Depression, corporate profits have broken records for the last three years.  As companies retrenched and laid off their employees to cope with a crash in demand, they became more nimble and cost-conscious.  As the economy recovered, instead of hiring back old employees, they outsourced jobs overseas or automated wherever possible, lowering their operating costs and increasing profits.  In the long-run, the U.S. economy will be stronger and more globally-competitive as a result.  But, in the short-term, the number of people living below the poverty line in the US will surely increase.

Those jobs are not coming back.  Edelman suggests investing more heavily in education and skill development, and I agree.  Because the funding source is local, our current public education system is failing to educate huge swathes of the population in a vicious cycle that creates a poverty trap.  Setting aside the fact that discriminating on the basis of zip code is morally wrong, as I have discussed on this blog, it will only exacerbate our competitiveness problem.

On the Program for International Student Assessment (PISA) test, a global test given to 470,000 students in 2010, the U.S. ranked 14th in reading, 17th in science, and 25th in math.  But these numbers do not tell the entire story.  When the results are segmented by the percentage of students participating in the subsidized lunch program, which is the most accurate gauge of poverty levels in schools, the level of stratification is striking.  In schools where less than 10% of students apply for subsidized lunch, the U.S. has the highest PISA scores of any OECD nation.  In schools with more than 50% participation, the U.S. sits between Austria and Luxembourg.  Mel Riddle, the head of the National Association of Secondary School Principals, explains the other side of that coin:

The problem is not as much with our educational system as it is with our high poverty rates. The real crisis is the level of poverty in too many of our schools and the relationship between poverty and student achievement. Our lowest achieving schools are the most under-resourced schools with the highest number of disadvantaged students. We cannot treat these schools in the same way that we would schools in more advantaged neighborhoods or we will continue to get the same results. The PISA results point out that the U.S. is not alone in facing the challenge of raising the performance of disadvantaged students.

This is a travesty for a number of reasons.  Not only are we denying huge numbers of children a decent education, we are also diminishing our own competitiveness as a nation in the future.

In the next post, I will talk about the other three reasons.


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What Do I Think of Education and Bridge International Academies? Pt. 5

The following is part five of a five-part post about education in development and Bridge International Academies.

In the last post, I talked about how Bridge is able to leverage its economies of scale to both utilize huge amounts of data to make decisions and, once those decisions are made, they can be rolled out en masse.  I will give a few concrete examples of how this works in practice.

Last September, we wanted to see whether offering a free month of school and having a grand opening ceremony with a bouncy castle would boost enrollment.  So we did what most respectable startups exploring a new product or market would do: we tested it.  Of the nine schools we opened last September, four had a grand opening ceremony (GOC) and first month free (FMF), two had only FMF, one had only GOC, and two had neither.  When I looked at the numbers, the results were amazing.  Not only was initial enrollment nearly three times what we had experienced in the past, but the conversion rate – the most important factor in measuring the efficacy of a marketing promotion in retail – was 85%.  This is practically unheard of in retail.  In other words, 85% of people tried the product and decided to buy it.  When was the last time you started paying after the free trial expired?

When I shared the results with the management team, the action was relatively decisive.  With the 30 January-2012 schools scheduled to be opened in only eight weeks, they changed everything.  Effective as soon as possible, every new school would have a grand opening ceremony and every new student would be given a free month of school.  And, to make it fair, all 60 schools would have a GOC in January and every student would receive January free.   One by one, the managers detailed what needed to be done and set to work.

The IT team began making changes to the billing system and the smartphone application; the training team began prepping the training facilitators to communicate the new policy, and the operations team went out to each school to explain the changes directly.  Marketing began contacting companies that rent bouncy castles and negotiating prices, while government relations reached out to the elders in the community and invited them to attend as “Friends of the Academy.” Within 24 hours of my sharing the analysis, the company began preparing for a monumental change in the way things were done.  In January 2011, our largest school opened with 200 students.  In January 2012, the biggest had more than 700.

For me, the policy change had even greater implications.  Since each cohort of schools opened with different policies, regulations, and circumstances, it was difficult to isolate determinants of performance without introducing incredible amounts of bias.  But now, every school had a grand opening ceremony and January became a free month for every single student.  Therefore, the maximum attendance in January effectively equalized every school and made them as close to comparable as they would ever get.  Now, all of a sudden, we were able to actually measure the how factors like population density, school location, cost competitiveness, income levels, urban/rural, and relative importance of education, influence school size and profitability.

From our market research, we had hundreds of consistent variables about each community.   So I built a massive Excel model and ran some basic correlation analyses and scatter plots to identify the most important factors in determining where to open a school.  Based on the analysis, I created an algorithm to actually project the size of the school after one year that was accurate within a range of 100 students at 80% of schools.  We automated the report creation and incorporated a profitability model into each one, which would dictate land price and school size.  And, just like everything else at Bridge, once we had it right, the new report became part of the Bridge model, and is there to stay until the data proves it wrong.

In the next post, I will talk about other social enterprises and why I think the term is a misnomer.  If you have questions, feel free to email me at josh@developeconomies.com.


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What Do I Think of Education and Bridge International Academies? Pt. 4

The following is part four of a five-part post about education in development and Bridge International Academies.

The first and most obvious criticism of the Bridge model of education is that a scripted curriculum creates a non-dynamic learning environment for children.  The western model of education is presmised on the idea that critical thinking is essential to success.  The very idea of a liberal arts education is a distinctly Western concept.   So, naturally, when people here that our teachers are high school graduates who are taught to teach by reading to children from a script, they automatically assume that the quality of the education is poor.

It is true that the standard of education at a Bridge school is going to be far below that of more expensive schools.  But when compared with the alternatives – which include government schools staffed by unmotivated teachers and other non-formal schools offering little in-house teacher training – Bridge offers an education that is subject to rigorous testing and review.  For example, our curriculum is written by a team of Kenyan education professionals and managed by Teach for America alumni, all of whom have Masters Degrees in education.  It has a video team that films lessons to be reviewed by the curriculum writers.  They look for level of engagement among the students and adjust the approach to maximize comprehension and retention.  Student exams are digitized and reviewed both to identify weaknesses in the curriculum, but also review teacher performance.  Lastly, the school managers audit the teachers on a regular basis to ensuring that they are performing adequately.

Lastly, and most importantly, Bridge undertakes a rigorous longitudinal testing study of 5,000 students every six months to monitor improvements in reading and math.  Using a test developed by the Research Triangle Institute and USAID called the Early Grade Reading Assessment and Early Grade Math Assessment (EGRA / EGMA), Bridge compares the performance of 3,000 of its own students with that of 1,000 students at government and other non-formal schools.  The results, which are shown on the website, show strong performance gains in basic reading skills, compared with its peers and less strong, but still measurable, gains in math.  I know this because I was responsible for leading this student testing and performing the analysis.  Using this data we can then tailor our curriculum to address our problem areas and improve the curriculum.

This level of analytical rigor is simply not possible at other non-formal schools.  Why?  Because Bridge is able to leverage economies of scale.  It can invest huge amounts of resources into improving its model because it knows that all changes can easily be rolled out across every single school in a day.  When I first met Jay in January 2011, Bridge had just broken 10 schools and opened its first school outside Nairobi.  By the time I left, the company had 73 schools across Kenya.

This level of growth means two things.  First, since the unit economics are such that each individual school is profitable at a relatively small size, more schools mean additional revenue that can be poured back into the company.  And second, any major policy changes can be backed with incredibly rich data sets.  As the company’s business analyst, I was working with datasets with sample sizes in the tens of thousands.  For someone trying to use data to better understand how our parents think, pay, and act, and understand what makes a good school, I was in heaven.

In the next post, I will give some concrete examples of how Bridge uses data to perfect the model.  If you have questions, feel free to email me at josh@developeconomies.com.


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What Do I Think of Education and Bridge International Academies? Pt. 3

The following is part three of a five-part post about education in development and Bridge International Academies

The Bridge model is a fundamentally libertarian idea.  It is premised on the belief that school choice is a good thing.  Many organizations, including development titans like UNICEF, believe that education should be a public good, provided free by the government.  This may be true in theory, but, like most development theories, it is rarely true in practice.

For example, Kenya already technically has a free primary education system, where all students, regardless of socioeconomic status, are guaranteed the right to an education at no cost.  Yet, in the slums, where the houses built illegally, few government schools exist to serve the communities.  And even in areas where public schools do exist, additional fees payable to the head teacher and others mean that parents are paying almost as much for school as they do at Bridge.  Outside of Nairobi, many of the government schools are as close to free as a school can get in Kenya, but they are often overcrowded, far away, and staffed by complacent teachers who are either overburdened with too many students or complacent when it comes to teaching.

Much of the free primary education system in Kenya was subsidized by foreign donors.  But these donors eventually decided to scale back funding after massive corruption scandals were exposed.  In the main Kenyan daily newspaper, the Daily Nation, every day exposes a new corruption scandal.  Needless to say, the state of the government education system is underwhelming at best.

Because of the failures of the government system, thousands of non-formal schools have sprung up throughout the slums to serve these communities.  Education entrepreneurs, churches, NGOs, and other groups build and operate schools to fill the void left by poor state-run education.  While UNICEF and others would like to believe that these schools do not exist, they are everywhere.

When people speak and write about Bridge, they credit the company with a radical new approach to education, offering private education as a means of providing quality education.  But Bridge is hardly innovative in this respect.  Non-formal schools like Bridge have existed for decades.  It was not until the early 2000’s that a British academic named James Tooley began seriously researching education in the slums of India, Nigeria, Ghana, Kenya, and other countries, and finding bustling schools with hard-working teachers.  He published a book called The Beautiful Tree and several articles for the Cato Institute detailing his findings, which were influential in seeding the idea for Bridge.

Rather, the real innovation Bridge brings to this sector is its relentless pursuit of efficiency gains and systematization of the day-to-day running of a school.  Technology as a means of creating scalable payment and performance monitoring systems, a scripted curriculum written by subject-matter experts, modular school construction using low-cost materials – these are all key innovations that have the potential to revolutionize this sector.  But the concept of a low-cost private primary school for the poor is nothing new.

In the next post, I will address some of the criticisms of Bridge’s model of education.  If you have questions, feel free to email me at josh@developeconomies.com.


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What Do I Think of Education and Bridge International Academies? Pt. 2

I think that one of the reasons that Bridge has been so successful at innovating has been its willingness to bring in a multidisciplinary team to run the show.  People like me, who have no background in education, but a good deal of experience in other areas, bring fresh ideas to an industry that, apart from certain ed-tech companies and charter schools like KIPP, is not known for innovation.  Our head of operations was the former director of business development for Dominoes Pizza in Asia, responsible for introducing the retail chain to a completely new market.  The founders include one successful tech entrepreneur, a division lead at IDEO, the design firm, and an anthropology PhD.  It doesn’t get much more interdisciplinary than that.

Another reason I think it has seen success where others like it have seen failure is that it refuses to accept excuses for poor performance on the part of its employees and vendors, and sees itself first and foremost as service provider that puts its customer first.  As a generality, business in Africa moves more slowly and expectations are sometimes different.  The business culture – with many notable exceptions – is such that the customer is never at the top of the priority list.  The other day, a coworker told me that a vendor to whom we paid a lot of money to perform a service which he performed poorly – was upset that the management was too busy to see him.  “This is an outrage – I am a client,” he said.  The fact that we were, in fact, the client and he the service provider undoubtedly never crossed his mind.

Bridge demands quality from it suppliers, timeliness from its vendors, and results from its employees.  This mentality ensures that the best people for the job are in place, and they can perform their jobs efficiently.  In the NGO world (or at least the ones I have seen), this approach to doing business is hardly, if ever, the norm.   If a deadline is missed, people say “what can we do – it’s Africa time.” Or an NGO holds a conference that only attracts participants for the per diems and lunch provided.  Accountability is not part of the lexicon.  At Bridge, on the other hand, if a vendor screws up the logo on the 1,000 shirts it ordered, it refuses to pay until the mistake is corrected.  It’s only business.

That is because Bridge, above all else, is a business.  It happens to be building low-cost primary schools in slums, but it is first and foremost a profit-oriented enterprise.  If Bridge is going to reach 1,000 schools and one million children in countries around the world, it has to be laser-focused on the bottom-line to succeed.  Drawing from a talented pool of private sector veterans and a founder who started and sold a company in his twenties, Bridge understands this well.

This kind of truly business-minded approach to development is rare, even within the relatively new and trendy industry calling itself “social enterprise.” While many social enterprises – companies that try to turn a profit while doing good – struggle to balance the demands of a double bottom-line, Bridge has create a model where the profit motive is inseparable from the social mission – one cannot exist without the other.  If Bridge students perform poorly on the KCPE exam – the test culminating primary education in Kenya – parents will pull their kids from Bridge schools en masse.  On the other hand, if they perform better than students at other schools, Bridge schools will double in size in a day.

That is because poor parents, just like middle- and upper-income parents, are discerning consumers when it comes to education.  They look for quality and, more importantly, value for the little money they have.  This is generally true for most products and services, but particularly so for education, which parents see as a means of getting out of the slums.  For Bridge to grow, it must be educating its students better than the alternatives in the community – either government schools or other non-formal schools.  In this case, it means ensuring that we outperform other schools – both government and other non-formal schools.

In the next post, I will explain the public education system and the origins of non-formal schools. If you have questions, feel free to email me at josh@developeconomies.com.


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