"In many developing countries, private unaided schools are serving the poor in large numbers. Some commentators view their presence as undesirable - in particular assuming that there is a conflict between 'commercial gain' and 'concern for the poor'. We show one way in which there is no conflict...

"It is the intention of government that private schools in Hyderabad are prevented by regulation from exhibiting the basic manifestations of competitive markets - low prices, innovation, good service and so on. However, private schools do, in practice, manifest these features. This paradox is...