Education for all: the private sector can contribute
The private, or non-state sector, in education can include independent, community-based, NGOs, faith-based organizations, trade unions, private companies, small-scale informal providers and individual practitioners. Between 1990 and 2010, the percentage of students in low-income countries attending private primary schools doubled, from 11 to 22% (Baum et al., forthcoming), and in more than 70 countries over a fifth of all students go to either private primary or secondary schools.
The forms of private involvement in education
The main rationale for involving the private sector is to maximize the potential for expanding equitable access to schooling and for improving learning outcomes. Private involvement in education can help to increase the level of financial resources committed to the sector and supplement the limited capacity of government institutions to absorb growing demand. There is also increasing evidence to suggest that the private sector is well equipped to meet the growing differentiated demands of specific groups, for example, religious ones – even when the state provides sufficient places in public schools and universities.
To understand the role the private sector could play and realise the potential benefits that its involvement could provide, an understanding of how countries are currently engaging with the private sector is required. A government has several options involving different financing and provision solutions: independent private schools, government-funded private schools, privately managed schools, and voucher schools. Independent private schools are funded, owned, and contracted completely separately from the state system. Government-funded private schools are run by non-state providers that receive support from the government in the form of direct payments, bursaries, grants, subsidies, or a transfer of schools resources such as textbooks. Privately managed schools are funded by the government but managed by private entities. These schools often have to meet performance benchmarks or other learning output measures through a charter or contract with the government. Voucher programmes typically involve the government paying private operators based on the number of enrolled students.
The added value of private education
Increased private involvement can improve pedagogic, technical and management skills across all levels of education. Additionally, its greater management flexibility means that private schools can more easily introduce curricular and programme innovations and improved assessment techniques. Some studies show that the learning outcomes in private schools are equal to or better than those of public schoolstudents (Box 1). In Andhra Pradesh, India, for example, a school voucher scheme has been shown to save the state more than two-thirds of pupil capitation, while enabling the students to significantly improve results across all subjects. Indeed, despite students spending less time learning mathematics and language, and although their teachers had lower levels of formal education and training than their public-school peers, the private-school voucher students achieved significantly better overall results. Private schools appear to have a longer school day and school year, smaller class sizes, lower teacher absence and extra time devoted to other subjects – English, science, social studies and Hindi – (Muralidharan and Sundararaman, 2013).
The potential of engaging private sector in education
In Pakistan, a 1990 to 1999 boom led to 8,000 new private schools being set up in urban and rural areas, reaching low- and high-income households. For the poorest in rural areas, the share of private schools increased 6%, with schools charging less than a dime a day. Private provision has helped to increase rural enrolment and from low-income household (Andrabi et al., 2006).
In Kenya, unrecognized, low-cost or affordable private schools are having a large effect on test scores, although nearly two-thirds of them operate at lower cost than median government schools (Bold et al., 2011).
In 2000, the Government of Bogota, Colombia, built 25 state of the art schools in the poorest parts of the city and leased them, through competitive bidding, to private operators on 15-year contracts. More than 26,000 students have benefited, with rigorous impact evaluations revealing that students in these concession schools are less likely to drop out and that their test scores improved (Barrera, 2007).
The Non-Formal Primary Education Program of Bangladesh’s NGO BRAC has grown over the last 20 years to serve more than 1.5 million children in over 20,000 pre-primary and 32,000 primary schools – 11% of the country’s primary cohort. The curriculum is the same as government schools, but they enrol and retain more hard-to-reach children, such as girls, who make up 65% of their pupils.
Other studies show that private providers can be more cost-efficient, being able to operate at lower costs than their government counterparts, while achieving the same or better results. Parent involvement in private school has also demonstrated to have positive effects on learning, teacher motivation, student attendance, etc., while active engagement results in families and communities holding schools accountable to a much greater degree. Indeed, research has consistently shown that when parents are involved in their children’s education, students do better. In this, fee-paying schools have an advantage that state schools do not – the fact that parents are free to choose or change their child’s private school means that there is a built-in accountability mechanism.
The need for strong regulation
Whatever its apparent advantages, private sector engagement in education, nonetheless, requires a strong regulatory framework to ensure high-quality delivery and equity while at the same time encouraging investment and competition. Too often, regulation is poorly developed and discourages private investment without any gain in educational quality. Indeed, enforced standards are key to ensuring the long-term sustainability of the private education sector and its credibility in the market. Perceptions of the quality of private education are fundamental and can be easily damaged – bad publicity about private providers offering poor quality can harm the reputation of the whole sector. The World Bank’s Systems Approach for Better Education Results (SABER) – Engaging the Private Sector (EPS) tool supports governments to strengthen or establish a strong regulatory environment. The tool collects data related to four key policy areas – encouraging innovation by providers; holding schools accountable; empowering all parents, students, and communities; and promoting diversity of supply – that international evidence has found effective for strengthening education service delivery and accountability amongst stakeholders.
Autonomy has been found to improve learning outcomes in both public and private schools with most high-achieving education systems allowing schools to make their own decisions about teacher hiring practices, curriculum development or resource allocation. Decision-making at the school level enables the creation of a learning environment best suited to students’ needs (Hanushek et al., 2013; Bruns, Filmer, and Patrinos, 2011; Baum et al., forthcoming). But autonomy must, in turn, be reinforced by accountability to ensure schools are delivering quality education through clear learning and teaching standards (Bruns, Filmer, and Patrinos, 2011), with sanctions enforced if standards are not maintained. In a strong regulatory environment, holding providers accountable comes both from the government, as well as parents, students and communities in which the schools operate. Empowering parents, students, and communities means that parents are aware of the learning, or the lack of it, taking place in their child’s school. They should also be able to use their voices to hold the school and government accountable regardless of their socio-economic background.
Finally, governments should enable a variety of providers to enter the market, as this will increase client power and enable citizens to make informed choices about where to send their children (Baum et al., forthcoming). Availability of transparent information is key to help parents either make choices regarding schooling or advocate changes and improvements in schools. All this, however, relies on governments having the capacity – human and financial – to monitor, report on and enforce compliance (Box 2).
Ensuring regulation compliance: the Punjab education foundation
The provision of incentives – access to subsidies, credit, training and other resources – for the private sector, in exchange for compliance to regulations, can prove highly efficient. Launched in 2005, the Punjab Education Foundation Foundation-Assisted Schools programme has enable 1.2 million poor students in Pakistan to attend non-state primary and secondary schools. The schools are first evaluatedagainst quality and cost-effectiveness criteria, and once selected, on condition that they abolish entrance criteria and fees, schools receive a monthly per-student enrolment subsidy for up to 500 students. Subsidies are conditional on minimum learning levels: schools are ejected if they fail to achieve a minimum pass rate in two consecutive tests. Sharp regression discontinuity estimates show that the threat on schools that barely failed the test for the first time induces large learning gains. The large change in learning between the first two test rounds is likely attributable to the accountability pressure given that a large share of new programme entrants failed the first test round. An earlier study showed evidence of significant impact on the number of students, teachers, classrooms and blackboards in the selected schools (Barrera-Osorio et al., 2011).
Education is a basic human right and governments have the responsibility to ensure and protect this, but the state need not be the sole provider. An education system that acknowledges public and private providers and has accountability mechanisms to strengthen service delivery amongst the various education stakeholders. Governments can guarantee access to education through finance and private provision. Good ideas need to be piloted and subjected to rigorous assessments, the results of which should then be used to adjust programmes accordingly and successful pilots then scaled up as appropriate.
References / Andrabi, T., Das, J., Khwaja, A.I., 2006. A Dime a Day: The Possibilities and Limits of Private Schooling in Pakistan. World Bank Policy Research Working Paper 4066. Washington DC., USA. // Barrera-Osorio, F., 2007. The impact of private provision of public education: empirical evidence from Bogota’s concession schools. World Bank Policy Research Working Paper 4121. Washington DC., USA. // Barrera-Osorio, F., 2011. Evaluating public per-student subsidies to low-cost private schools: regression-discontinuity evidence from Pakistan. World Bank Policy Research Working Paper 5638, Washington DC., USA. // Baum, D., Lewis, L., Lusk-Stover, O., Patrinos, H.A. forthcoming. What Matters Most for Engaging the Private Sector in Education: A Framework Paper. SABER Working Paper Series. World Bank, Washington DC., USA. // Bold, T., Kimenyi, M., Mwabu, G., Sandefur, J., 2011. The High Return to Private Schooling in a Low-Income Country. Working Papers 279, Center for Global Development, Washington DC., USA. // Bruns, B., Filmer, D., Patrinos, H.A., 2011. Making Schools Work: New Evidence on Accountability Reforms. World Bank, Washington DC., USA. // Hanushek, E., Link, S., Woessmann, L., 2013. Does school autonomy make sense everywhere? Panel estimates from PISA. Journal of Development Economics 104: 212- 232. Elsevier, Amsterdam, Netherlands. //Muralidharan, K., Sundararaman V., 2013. The Aggregate Effect of School Choice: Evidence from a Two-stage Experiment in India. NBER Working Papers 19441. Cambridge, Massachusetts, USA.