"To the extent that Americans think about Sweden at all, it usually conjures images of gibberish-speaking Muppets, Ikea furniture, and, when it comes to government policies, the welfare state. So it’s something of a surprise that a higher fraction of Swedish students go to privately run (and mostly for-profit) schools than in the U.S.The system was put in place in the early 1990s by a center-right (by Swedish standards) government, inspired by the ideas of the godfather of free market economics, Milton Friedman. In a 1955 article titled “The Role of the Government in Education,” Friedman advocated for a system in which governments would issue vouchers to parents that would be redeemable toward tuition payments at a private school of their choice. This voucher system would allow market pressures to work their magic, as schools would be forced to improve their quality in order to compete for students and their voucher dollars. (Even if governments remained in the education business, public schools would face the same market pressures to maintain enrollment as private schools.)
There are differences between the libertarian ideal espoused by Friedman and the actual voucher program the Swedes put in place in the early ’90s. Friedman would have allowed schools to charge parents more in tuition than what a voucher could cover, potentially allowing rich parents to send their kids to better-resourced schools than poor parents could. Friedman’s system also allowed for choice on both sides of the market: Just as parents got to pick where to send their kids, schools had the right to accept some applicants and reject others. In the name of equal access, Sweden forbade nonvoucher tuition payments and permitted only limited screening (based on scholastic performance) for high school admission.
But Swedish school reforms did incorporate the essential features of the voucher system advocated by Friedman.The hope was that schools would have clear financial incentives to provide a better education and could be more responsive to customer (i.e., parental) needs and wants when freed from the burden imposed by a centralized bureaucracy. And the Swedish market for education was open to all, meaning any entrepreneur, whether motivated by religious beliefs, social concern, or the almighty dollar, could launch a school as long as he could maintain its accreditation and attract “paying” customers.
For a while, at least if media accounts of the reforms are any indication, things looked like they were going pretty well. Voucher school students consistently outperformed their counterparts at government schools; in 2008, the London Telegraph described the reforms’ impact as “tremendous.” The number of private schools increased tenfold in less than a decade, with a majority run as for-profits.
But in the wake of the country’s nose dive in the PISA rankings, there’s widespread recognition that something’s wrong with Swedish schooling. As part of ongoing efforts to determine the root cause, the Swedish Schools Inspectorate (the equivalent of the U.S. federal government’s Department of Education) called for a regrading of a subset of standardized tests administered during 2010 and 2011. In total, nearly 50,000 students at all grade levels from more than 700 schools had their tests in English, Swedish, science, and math re-evaluated."