Schools run by private enterprise? Free iPods and laptop computers to attract students?

It may sound out of place in Sweden, that paragon of taxpayer-funded cradle-to-grave welfare. But a sweeping reform of the school system has survived the critics and 16 years later is spreading and attracting interest abroad.

"I think most people, parents and children, appreciate the choice," said Bertil Ostberg, from the Ministry of Education. "You can decide what school you want to attend and that appeals to people."

Since the change was introduced in 1992 by a center-right government that briefly replaced the long-governing Social Democrats, the numbers have shot up. In 1992, 1.7 percent of high schoolers and 1 percent of elementary schoolchildren were privately educated. Now the figures are 17 percent and 9 percent.

In some ways the trend mirrors the rise of the voucher system in the U.S., with all its pros and cons. But while the percentage of children in U.S. private schools has dropped slightly in recent years, signs are that the trend in Sweden is growing.

Before the reform, most families depended on state-run schools following a uniform national curriculum. Now they can turn to the "friskolor," or "independent schools," which choose their own teaching methods and staff, and manage their own buildings.

They remain completely government-financed and are not allowed to charge tuition fees. The difference is that their government funding goes to private companies which then try to run the schools more cost-effectively and keep whatever taxpayer money they save.

Bure Equity, listed on the Stockholm Stock Exchange, is the largest private school operator in Sweden and is expanding rapidly. In the first quarter of this year, net profit for its education portfolio rose 33 percent to $3 million.

Such profit-making troubles Swedes who don't think taxpayers should be enriching corporations.

The Social Democrats strongly opposed the change as anti-egalitarian, but when they were re-elected to power in 1994, they found it was so popular that they left it in place, though they imposed a lid on fees.

Barbro Lillkaas, a 40-year-old accountant, is considering putting her child in a private school, and has no problem with the profit motive.

"If you run a good operation then you make a profit. But you won't get any students if you are bad," she said. "You have to do a good job to get money; that is even more important for a private school."

At the Vittra chain of 27 schools owned by Bure Equity, children of different ages share classrooms and have individual curriculums designed for their needs and skills.

Despite initially being labeled elitist, the new system has gradually gained support and is being recognized as a success story.

Andrew Coulson, an education expert at the Cato Institute, a libertarian think tank in Washington, D.C., called the Swedish program "a beacon, being more market-like than any other among rich countries," but said he had caveats.

In an e-mail, he said the system needed to be more flexible about how money can be spent, students recruited and curriculums chosen. "It's not a very market-like program. But since it's the best thing around in the rich world, it's definitely worth watching," he said.

Michael Fallon, who served in Britain's former Conservative government, said his party is working on a similar plan to be implemented if it defeats the ruling Labour party in the next election.

"It is a model that is clearly working and we need to learn from that," said Fallon, who visited Sweden in May.

In the U.S., publicly funded private school voucher programs for low-income children exist in some areas, including Washington, D.C., Wisconsin and Ohio, but the issue still arises from time to time in the U.S. presidential campaign.

Some Swedes say the private system drains funds from public education, but officials say independent schools have forced public schools to raise their own standards and improve efficiency. Continued...