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Externalities and equity are the two major arguments failures that provide justification for government intervention in education. Supporters belive that the intervention will correct these failures. This paper seeks answers the following two questions in the context of Turkey: (1)Is empirical data supporting the arguments for government intervention? (2) Is government intervention correcting failures? A survey of previous studies and the other evidence show that (1) empricial data is far from supporting the arguments that justify government intervention and (2) government intervention is creating its own failures.