The Economist - UK (2022-04-02)

40 The Americas TheEconomistApril2nd 2022

CentralAmerica

Injudiciousjudges

“T

helawisa business,”saysJuan,a

34­year­old who sells legal docu­

ments,includingcopiesoftheconstitu­

tion,ona busystreetoppositeGuatemala’s

highestcourt.“ThelawsI selldon’tapply;

ratherthosewithmoneygettheirway.”It is

a commonviewina countryinwhichgun­

totingmensometimesguardjudicialoffic­

es,ostensiblytoprotecttheirinhabitants.

CorruptionandimpunitydamageCen­

tralAmericainmanyways,fromthedrain

ofpublicfundsintoprivatepocketstoa

dearthofinvestmentowingtounreliable

justicesystems.IntheNorthernTriangle

countriesofGuatemala,HondurasandEl

Salvador,some$13bneachyearisstolen

throughcorruption,estimatestheCouncil

onForeignRelations,a think­tankinNew

York.Thatdoesnotincludetaxevasionor

forgoneinvestment.

In FebruaryEl Faro, an investigative

outletbasedinElSalvador,publishedalle­

gationsthatAlejandroGiammattei,Guate­

mala’s president, received illicit funds dur­

ing his presidential campaign in 2019. (He

denies wrongdoing.) On February 15th Juan

Orlando Hernández, a former president of

Honduras,  was  arrested  on  suspicion  of

aiding drug gangs. He will be extradited to

the United States. Last year Mr Hernández’s

brother  was  sentenced  to  life  imprison­

ment in New York for drug­trafficking.

It  is  highly  unlikely  that  either  Mr

Giammattei  or  Mr  Hernández  will  be

charged  in  his  home  country.  In  2019  Mr

G UATEMALACITY

Legalsystemsarecorruptandjudges

frequentlyintimidated

Erika Aifán, forced to flee

mer  left­wing  president,  introduced  a  se­

ries of reforms, these schools often select­

ed students using their own criteria, such

as  primary­school  grades  or  whether  par­

ents were married in the Catholic church.

They could also charge top­up fees.

A  study  from  2016  by  Gregory  Elacqua

and  Humberto  Santos,  two  academics  in

Chile,  compared  the  degree  to  which  rich

and  poor  kids  were  educated  separately

under the voucher system in Santiago with

what would have occurred if students had

attended  the  school  nearest  their  homes.

They  concluded  that  schools  were  more

segregated  than  neighbourhoods.  This

contradicts the claim that voucher schools

simply reflect the societies they serve. 

Richer  Chileans  also  do  better  at  uni­

versity.  In  order  to  get  into  one,  students

must take an admissions test similar to the

satin the United States. More than half of

those  who  achieve  top  scores  come  from

the  10%  who  go  to  elite  (ie,  non­voucher)

private schools. Students who do not score

well largely end up in less prestigious tech­

nical  institutes.  This  means  that  many

poorer  students  finish  higher  education

with big debts and degrees that employers

do not value much. Fully 54% of students

who have taken out the main student loan

have defaulted or are in arrears, compared

with 32% of student debtors in America.

Successive  presidents  have  tinkered

with the system. Sebastián Piñera, the cen­

tre­right  president  during  the  protests  in

2011, lowered the interest rate on the main

student loan from 6% to 2%. In 2016 Ms Ba­

chelet made university free for the poorest

60%  of  students.  This  bung  to  students

was popular, even if the reform meant that

there was probably less public money than

there might have been for primary and sec­

ondary  education.  Between  2012  and  2018

public  spending  on  tertiary  education  in­

creased  more  in  Chile  than  in  any  other

oecdcountry,  while  public  spending  on

non­tertiary  education  increased  only

somewhat faster than the oecdaverage. 

Mr  Boric  has  promised  to  improve

state­run  primary  and  secondary  schools,

but has so far provided few details. He has

pledged to continue some of Ms Bachelet’s

reforms, alongside increasing funding for

public  nurseries.  However,  he  also  wants

to  remove  “market  dynamics”  in  educa­

tion,  meaning  competition.  He  wants  to

eliminate some standardised tests and re­

place an “extensive and content­filled cur­

riculum”  with  one  that  emphasises  cre­

ativity,  gender,  multiculturalism  and  the

environment.  Some  teacher  evaluations

could be scrapped. 

Fabián  Guajardo  of  Nodo  xxi,  a  leftist

think­tank,  says  this  will  reduce  pressure

on  teachers  and  students,  something  the

teachers’ unions have long favoured. Cris­

tián Cox Donoso of Diego Portales Univer­

sity in Santiago likens it to “tearing down a

building  that  has  taken  two  decades  to

build”.  Policymakers  need  “to  know  every

year if reading, maths, science, history and

social­science  targets  are  being  achieved

or not, to help them to respond better,” he

says,  but  “the  romantic  left...wants  to  get

rid  of  this.”  The  new  education  minister

used to be a teacher.

Mr  Boric  also  plans  to  forgive  all  stu­

dent  debt  and  extend  the  free  public  col­

lege scheme. His team puts the cost of for­

giving  student  debt  at  $4.7bn.  Other  esti­

mates are higher, if defaulted debts that are

already  being  paid  off  by  the  state  are  in­

cluded.  In  December  Mr  Boric  estimated

that  the  total  cost  of  the  policy  would  be

$12bn,  or  3.4%  of  gdp.  The  details  of  the

plan  are  still  being  hashed  out,  but  it  is

likely to be implemented over 20 years. 

Mario  Marcel,  the  new  finance  minis­

ter,  appears  to  understand  that  forgiving

student  debt  is  a  sop  to  the  middle  class.

“What  one  wouldn’t  want  is  for  student

debt forgiveness to be paid for by workers

or slum­dwellers,” he says. He believes the

policy  should  be  funded  by  raising  taxes.

He aims to raise the total tax take from 21%

of gdpto 26% in four years.

It will be hard for Mr Boric to back down

from these promises. His supporters want

their student loans written off, and will be

furious  if  they  are  not.  As  the  new  presi­

dent  knows  all  too  well,  young,educated

Chileans  are  not  afraid  tomaketheir  dis­

content heard on the streets. n

The legacy of the Chicago school

Sources:OECD;UNESCOInstituteforStatistics

*Chargedbypublicinstitutionstonationalstudents

†Purchasing-powerparity ‡Populationwithinfiveyears

ofsecondary-schoolgraduationage

Germany

France

SouthKorea

Australia

Canada

Japan

Ireland

Chile

UnitedStates

England

129630

Average annual bachelor’s degree tuition fees*

2020-2 academic year or latest available, $’000 at PPP†

100

80

60

40

20

0

1910200090801970

Tertiary education, gross enrolment ratio‡, %

United States

Britain

Chile

Brazil

Argentina