ArticlesByValentinaRomei

Monday 12 December 2016

How austerity is crippling schools in southern Europe

While reforms are helping, budget cuts are sabotaging students’ performance

YESTERDAY

Fifteen-year-olds in southern European countries are struggling to catch up with their peers in international tests in maths, reading and science.

For years, southern European countries have failed to climb up the OECD’s Pisa rankings which assess the performance of 15-year-old students in mathematics, literacy and science.

Greece ranks 43rd out of 72 countries in science, the lowest score among advanced countries, and similar to the levels reported in Chile and Bulgaria. And while Spain and Italy do significantly better then Greece, both scored below the OECD average ranking 29th and 34th in the science assessment.

Two-in-10 Greek students fail to reach the baseline level of proficiency in maths, science or literacy, meaning they are unable to work out the price of an item in a different currency and struggle when reading text to pinpoint its main ideas. Worryingly, the situation has been worsening consistently in the past decade.

Conversely, in Spain, Italy and Portugal, one-in-10 students fail to reach these levels, slightly below the OECD average.

This rift was not always there. In 2006 Greece, Portugal and Italy reported very similar scores, now they differ by more than 40 points — equivalent to more than a year of schooling. Portugal dodged the group of low-performing countries altogether.

What happened to schools in Greece?

The European Commission’s education monitor says the Greek education and training sector was “strongly affected by very low and decreasing public spending, due to strict fiscal consolidation”. Indeed, funding has dropped more than one-third since 2009 and public spending on education is the lowest in the EU.

But funding is not the only problem. Teaching time in Greece is the lowest in OECD countries, about 40 per cent lower than the OECD average. The same EU report also points to “a lack of a culture of performance evaluation” as well as the need for “implementing new decentralisation measures to increase the financial and organisational autonomy of primary and secondary schools across the country”.

Contrary to most European countries, Greek schools are not able to select, pay or fire their schoolteachers, while teachers cannot pick courses, determine the content of the classes they teach or pick their text books. In terms of school autonomy, Greece ranks at the very bottom among 35 OECD countries.

So how did other peripheral countries improve their school systems?

Portugal, Italy and Spain have all introduced reforms aimed at improving the quality of teaching.

In Portugal these included a new funding formula linked to new performance criteria. Italy introduced new school and teacher evaluation systems while Spain’s school reforms — known as LOMCE — introduced a newly designed curriculum, assessments to detect difficulties at an earlier stage and a different approach to the promotion of skills-based teaching and learning.

The European Commission’s education monitor expects school outcomes in all these countries to improve further in the next few years.

Will these reforms suffice?

At this stage it is probably too early to tell, but despite the improvements Spain and Italy still have a wide gap to close and a few issues to tackle.

Both countries are marked by vast regional disparities. The poor regions of Italy and Spain are among the worst performers in the education league. Calabria, in the south of Italy, has a similar proportion of students lacking basic skills as Latin America, while students in Trento, in the wealthy north, perform similarly to their Singaporean peers, the league’s top performers.

Similarly, school outcomes in Madrid or the Extremadura region differ by 54 points in maths, a variation as wide as that between the first and the 23rd best performing countries.

While Portugal’s reformist efforts were coupled with a sizeable chunk of government spending reorientated towards education, Spain, Greece and Italy report some of the lowest shares of education spending in the EU.

Italy’s education system faced some of the most severe cuts — in some cases as high as 20 per cent — despite already being the OECD state with the lowest share of education spending.

To escape what the OECD calls the low-growth trap, peripheral countries need high human capital which can be delivered through efficient and high-quality education systems. Yet education has so far been “a net loser from austerity policies” in these countries”, according to a paper on “The asymmetrical educational consequences of economic recession in Southern Europe”.

The OECD students assessment results released this week gave further proof that peripheral countries must combine reforms with more spending, regardless of their budgetary constrains.

Intercountry adoption of children falls sharply

Rising costs and drop in poverty rate among reasons for decline

FT Data

DECEMBER 6, 2016

by: Valentina Romei

Up to the mid-2000s, intercountry adoption had grown into a popular way of caring for abandoned children. But in 2014, all 24 of the major receiving countries reported a 70 per cent drop in the number of adoptees over a 10-year period — a steep trend which continued in 2015.

The US remains the world’s largest intercountry adopting state, but while 23,000 children were adopted in the US in 2004, this figure had fallen to 5,000 in 2015.

This steep global decline raises questions. Are better alternatives available? Is it the result of fewer abandoned children globally?

An array of theories has emerged, ranging from rising costs and political tension to burgeoning bureaucracies that have made it more difficult for children to settle with a family.

Professor Peter Selman, a leading international adoption specialist and the man behind The Hague’s annual adoption statistics report, has been observing this phenomenon for a number of years and has identified two main trends: “Fewer children are being abandoned and domestic adoption is rising”.

Declining poverty and better child care systems

Poverty is a driving factor in a family’s decision to abandon their child. A rise in living standards in the past decade in some of the main countries that send children — China, Russia and South Korea to name a few — is a plausible explanation behind the decline.

The case of China is emblematic. It has been the largest origin of intercountry adoptees for the past decade. In 2005 alone, 15,000 Chinese children — mostly little girls, as a result of the one-child policy — were adopted by families from other countries. That figure then dropped to roughly 2,800 in 2014, an 80 per cent fall.

“China is in the process of creating a welfare system for children that really did not exist up until five years ago,” Chuck Johnson, president and chief executive of the National Council for Adoption told the FT.

“The system is still in its infancy but they are putting a lot of effort into it,” he added.

China is not alone. Domestic adoptions are rising in many Asian countries including Vietnam, the Philippines and India as well as in eastern Europe.

“Every country in the CEE/CIS region is — to a varying extent and with different levels of success — engaged in the reform of the child care system,” reads a UN report on childcare in eastern Europe.

Bulgaria, for example, with the help of major investments from the European Commission, is reforming the type of services it offers to communities, providing increasing support to vulnerable families as a way of preventing child abandonment. Hundreds of institutions have been closed as a result, particularly those for the very young. Meanwhile, the inadequate institutions for orphans and abandoned children that used to populate the Russian Federation have virtually disappeared, said Jean-Claude Legrand, an adviser on child protection at Unicef.

The UN estimates that the number of children in institutions dropped 74 per cent in Bulgaria in the 10 years to 2014, and was at least halved in one in three of the eastern European countries.

In Russia nearly two in three children in formal care are now either adopted, or in foster or guardian care compared with one in three in the 1990s, when the vast majority were in institutions.

However, Mr. Legrand warns that there is little improvement in reducing the abandonment of disabled children. A Unicef report confirms that “many people are still under the misapprehension that an institution is the best place for a disabled child”.

Nationalism a big factor

Chuck Johnson of the US-based National Council for Adoption, however, has a different view of the trend. Although there may have been a decline in abandoned children in China and a rise in those adopted domestically, “you are still looking at a country that a few years ago in the China Daily acknowledged that over 500,000 are in institutional care”, he says.

“The real elephant in the room is nationalism” says Mr Johnson. “No country really wants to release their own to another country even if they know they can’t take care of the child, even if it’s in the best interest of the child.”

He said Russia stopped intercountry adoptions to the US “for political reasons, not because of concerns over intercountry adoption”. The ban has been in place since January 2013 but a US state department report suggests that it is “evident there are many children in Russia who could benefit from intercountry adoption, and who remain institutionalised as a result.”

Complex story in Africa

At one time intercountry adoptions from African nations were rare. They rapidly increased as a result of “celebrity adoptions”, including American singer Madonna adopting two children from Malawi.

Intercountry adoption from Africa rose from 5 per cent of all intercountry adoptions in 2003 to 28 per cent in 2014. But many countries are now showing a reversal of the trend, including Ethiopia, by far the largest African country of origin.

“Adoption in western terms — a child is permanently removed from their family and community — does not exist, and it’s not understood in many African countries,” Prof Selman explains. “A lot of African countries believed that they [the children] would go to America, they would get an education, they would get rich and they would come back to help them.” When this did not happen, a revision of the adoption process began.

Rising complexities and costs

The most controversial issue is probably the role of the Hague Convention, an international agreement aimed at “protecting children and their families against the risks of illegal, irregular, premature or ill-prepared adoption abroad”. The risks are very real because the large sums of money involved attract unscrupulous individuals and make it difficult for governments to control the process.

Many countries, including Romania, Bulgaria and Guatemala, have stopped intercountry adoptions altogether while revising their processes or bringing them in line with the convention.

Critics believe that the rising complexities and costs of international adoptions as regulated by the Hague Convention are responsible for the decline in intercountry adoptions. “You are looking at a cost of about €30,000 for the whole process; not many people can afford that, especially in these economic conditions,” Roberta, an Italian parent-to-be, told the FT.

Adoption of healthy infants

“The US has observed that the profile of Chinese adoptees changed from 95 per cent healthy girls in 2005 to more than 90 per cent special needs children today,” says the US state department report.

China is taking its cue from Europe, according to a study by Prof Selman. Putting older children and those with special needs up for adoption has been “a feature of adoption in EU sending countries for some years”. In 2009, just half of Chinese adoptees had special needs, compared with more than 80 per cent of children sent by Latvia and Lithuania.

Outlook of intercountry adoptions

Will intercountry adoptions pick up again? The prognosis largely depends on which view one takes on the decline of intercountry adoption.

Mr Johnson believes international adoptions will pick up again in the US once processes are improved, but his view is at odds with Prof Selman’s verdict. For him the decline is largely the result of socio-economic changes in sending countries and a shift towards alternative forms of caring for children. “My feeling,” he says, “is that we have now 10 or 11 years of continuous decline and I don’t see that trend reversing.”

Why Italy’s referendum is not the same as Brexit or Trump results

Political, economic and demographic factors played out differently in reform vote

Matteo Renzi, Italy's prime minister, after the referendum result was clear © Bloomberg

DECEMBER 5, 2016

by: Valentina Romei

“Nobody ever loses in Italian politics; I have lost,” said Matteo Renzi, the outgoing prime minister, in reference to the habit of Italian politicians to stay in power regardless of their failures. His concession came an hour after exit polls that all but confirmed his defeat in the constitutional reform referendum.

But who voted against reform?

Opposition was strongest in areas where economic dissatisfaction is rife and where political antagonism is strong.

Political reasons

A statistical analysis of the results shows political loyalties played a large role in the defeat. In provinces where more people voted for Mr Renzi’s rivals in the Five Star Movement and for Silvio Berlusconi’s party — both supported a No vote — in the 2013 general election, there was a stronger rejection of the referendum. In contrast, a vote for the prime minister’s centre-left Democratic party (PD) in 2013 is associated with a larger share of votes in favour of reform.

However, in the charts above all the points are located towards the top, showing that reform was largely rejected across the board, even in centre-left strongholds. In provinces such as Livorno and Ferrara, where more than a third of the population voted for the Democratic party in 2013, the majority of the population rejected constitutional reform. Only in 11 of the 48 provinces where the Democratic party reached over 25 per cent of votes three years ago did votes in favour of constitutional reform outweigh those against.

Economic reasons

Economic discontent also played a role in the premature ending of Mr Renzi’s mandate. Analysis reveals that higher unemployment rates and lower levels of per capita income were associated with more emphatic votes to reject constitutional reform.

While it is true that economic discontent was associated with greater support for the Five Star Movement and for Mr Berlusconi’s party in the general election of 2013, its correlation with the outcome of the referendum was even stronger, suggesting a deeper protest motivation behind the referendum vote.

However, even in provinces where unemployment is below six per cent — comparable with that of Germany — reform was still rejected. That is the case, for example, in the rich northern provinces of Belluno, Cuneo, Bergamo and Verbano.

Immigration

A recent increase in the share of the population born overseas was not associated with larger No votes in the Italian referendum, in contrast with the UK’s EU referendum vote in June.

In short, anti-immigrant sentiments may have had very little impact on the outcome of the Italian referendum.

Education

Another difference with the UK’s EU referendum and Donald Trump’s victory in the US election is the relatively minor role played by levels of education in determining the outcome of the vote.

While it is true that a higher proportion of the population with a university degree corresponded to a higher share of the Yes vote — and vice versa for areas with larger proportions of people with only a lower secondary level of education — the correlation is relatively mild, and higher educational attainment is also positively associated with support for the Democratic party and with per capita incomes. That means, overall, educational attainment played a smaller role than economic factors in the referendum vote.

Bottom line?

Unlike the demographically stratified votes in the UK and the US, support for the No vote in Italy crossed economic and social divides. Political opposition and economic protest are associated with larger No votes, but it was their combination that truly led to the scale of the defeat for Mr Renzi. While the outcome of the Italian referendum is seen as another example of the rise of populism — and it certainly is, in the sense that populist opposition parties played active roles in the campaign — it differs in the weaker role played by education levels and the smaller impact of rising immigration.

Friday 25 November 2016

Six charts that are key to understanding Italy’s referendum- Dissatisfaction hampers support for reform of odd parliamentary system

Italy’s referendum on proposed constitutional changes on December 4 is unnerving markets and could prematurely end the premiership of Matteo Renzi, who has staked his term in office on the outcome.

Following the UK’s Brexit vote in June and the election of Donald Trump in the US, the Italian referendum has gained significance as the next potential opportunity for an anti-establishment vote. So what is it all about?

How the parliament could change

Currently two chambers, the Senate and the chamber of deputies, are both elected in the same way and in effect hold the same powers: both must approve a law in identical form. More often than not this leads to protracted negotiations, numerous amendments, and overly complicated legislation.

If Yes wins the referendum, the Lower House will become the primary legislative body, while the Senate will become a “House of Regions and Municipalities” with no veto and limited and specific legislative powers. If Yes wins, the number of senators will be cut from 315 to 100.

The Italian parliamentary system is currently one of the most burdensome in the world. Across both chambers, Italy has 952 members of parliament, the third-largest number in the world after China and the UK and one of the only four countries globally to have more than 900 MPs.

Although members of the UK’s House of Lords can claim expenses of up to £300 for each sitting day, they do not receive a salary. Italian senators are currently salaried but if the reform passes that will no longer be the case.

The cut in Senator numbers is even more critical in light of how much they get paid

According to the UK’s Independent Parliamentary Standards Authority, the gross salary of an Italian parliamentarian is the second-highest of major advanced countries after the US. It is higher than any other major European country, and nearly double what UK MPs receive. And this is without accounting for expenses and allowances.

Another core element of the reform: re-centralising power

If the reform goes through, regions would lose oversight of energy, strategic infrastructure and civil protection. The responsibility would instead go to the central government.

“Italy has become a quite decentralised country,” the OECD noted in its 2013 country report. Indeed, regional government accounts for over three-fourths of national procurement. That is around double the share in the UK and above most European countries.

According to the same report “for some policy areas the decentralisation to regions does not make much sense”. It highlights energy policy, where “current arrangements require every region to have its own strategic energy plan”.

Many economists support the redesign

“Once in place, the reform should permit more efficient policymaking, reduce ambiguity about who is responsible for what, avoid implementation delays due to subnational government not following through on national legislation,” writes the OECD.

The reform “would allow the government to regain certain key responsibilities, which would make the public administration more effective, while allowing simultaneous devolution and control on other areas”, Lorenzo Codogno, a former chief economist at the country’s Treasury department, has said.

Critics claim democracy will be impoverished

The main argument of critics is that the Senate’s limited legislative powers would undermine the checks and balances of the Italian constitutional system, especially in light of the new electoral reform. The eligibility of some of the regional representatives and how they can function in their double roles of functionaries and Senators also raised concerns.

They also point out there are many uncertainties over how the new system would actually work.

Anti-reform or anti-Renzi?

It is difficult to say whether the Italian public shares these views or whether a No vote would mostly indicate lack of support for Mr Renzi. A recent survey, for example, showed that only about one-in-10 Italians know the details of the reform, meaning anti-Renzi protest votes are playing an important role.

It is not difficult to understand why Italians are dissatisfied. This, after all, is a country where nearly one-third of the population is at risk of poverty or social exclusion and where youth unemployment is still at 37 per cent, and as high as 50 per cent in the south of the country. Polls appear to show those who live in the south and younger people are more likely to be against the reform.

Low levels of trust in Mr Renzi also do not help build a consensus. The prime minister is currently trusted by 32 per cent of the population, higher than any other party leader but 20 percentage points below the president, Sergio Mattarella.

But votes are harder to predict

It is illegal to publish polls for two weeks before elections in Italy, but the last available figures appeared to show No in the lead. This will not please many top Italian chief executives who almost unanimously expressed support for the reform.

Yet recent electoral results showed that we should treat voting intentions polls with a pinch of salt. The gap between support for Yes and No is fairly narrow and a large proportion of the population has not expressed a view on the vote.

Support is particularly difficult to gauge in Italy because a significant part of the electorate is not surveyed. More than 1m Italian expatriates took part in the 2013 general election, more than half living in European countries.

One million expat votes are not a game changer in a country where around 35m people will vote domestically, but they could make a difference in a tight race. In previous elections, Italians abroad have given little support to the Five Star Movement and Silvio Berlusconi’s party Forza Italia. Both support the No campaign.

Whatever the outcome, the market reaction to the No lead and the uncertainty has been decidedly negative.

The Italian government bond yield, a measure of market-perceived risk, has been rising, while the spread with the German and Spanish bonds has been hitting a new record high nearly every day.