The Regulation of Private Schools Serving Low-Income Families in Andhra Pradesh, India

This paper sets out some findings of a research project carried out in private unaided schools in low-income areas of Hyderabad, India. The part of the research project documented here was designed to examine the question: ‘Is the regulatory regime conducive to entrepreneurial action and market discovery’ with particular reference to the low-income schools in Hyderabad. This paper is narrowly focused, setting out the results of pattern matching empirical data with the Austrian economic concepts of entrepreneurship, rivalry, and market discovery. The research discovered that two regulatory regimes exist, one that is set out ‘on paper’ in the Education Acts and associated rules, and another that operates ‘in practice’. That is, there is a combination of regulations ‘on paper’ and regulations existing in an ‘extra-legal’ sector. Generally it was found that the regulations ‘in practice’ are consistent with market principles. Conversely the regulations set out ‘on paper’ are not conducive to entrepreneurial innovation and market discovery. Recommendations for potential policy initiatives include the possibility of legitimising the ‘extra-legal’ sector by introducing self-regulation possibly via self-evaluation systems for the private unaided schools. Copyright Springer Science + Business Media, Inc. 2005competition, entrepreneurship, profit, regulation, private schools, low-income families, developing countries, India,