Why Engage the Private Education Sector?


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Why Engage the Private Education Sector?

In my view, if we are really interested in Learning For All, it is important to consider the role of the private sector in education.  It is not private provision per se that we at the World Bank are interested in – the World Bank remains the world’s largest source of multilateral funds supporting public education in middle and low income countries around the world  – but rather what we can learn from private education providers who are innovating and adding value.  The World Bank's efforts in this space are organized around ways to explore and better understand private provision of various kinds in a deeper light.

As I said at a recent education conference organized by the IFC:

“My interest, and my organization's interest, is:  What works for the system.  For us, it's the public system.  We don't distinguish in our strategy.  It's the education system, everything that goes into that: households, the private sector, the government structure.  That public system has to work.  So if something works in a private school, we want to find out why and what we can transfer to the public system (and the research that shows those spill-over effects).  The worst possible outcome, in my opinion, would be that we find something that works in the private sector and only those families that go there benefit and it's shut off from the public system.  That's not a net gain.  A net gain is lessons that can be transferred and we get better public results.”

Seen from this perspective, the public sector learns, disseminates, and regulates.  It regulates for quality.  Admittedly, there aren't a lot of education systems that I know of that are regulating for quality.  In many of the countries where we work, in many of the low income countries, too much expected of government.  Governments are providers, governments are financiers, governments are regulators, governments are being asked to innovate.  Yet, we don't ask this of governments in OECD countries.

In the Netherlands, for example, the Dutch government does not provide any schooling.  All schools are funded equally, there is parental choice, and more than two-thirds of all schools are private.  Public schools are municipal schools.  The central government doesn’t finance them. A separate agency does assessment.  The government functions purely on the regulatory side. While the Netherlands sits at one end of a global spectrum in this regard, there might be some useful lessons for many other countries. 
If a country like the Netherlands is so focused, then why are we asking so much of governments in many developing countries?  I think part of the answer has to do with the fact that we are often regulating on inputs, such as salaries, buildings, materials.
When I first started working for the World Bank 22 years ago, and we were supervising our education projects, most of the discussion was about things like the size of the panels on the windows that we procured or what kind of materials went into the walls. In other words:  Nothing (really) to do with education, or at least – nothing to do with the quality of education.
We’ve changed a lot at the World Bank since those days. We've changed because of our clients and partners. Governments and education ministries are more demanding about quality.  So, once we realize what should be financed and figure out how to regulate for that, then I think we can make a lot of progress.
Quality is not a static concept.  You keep at it, you keep innovating, you keep regulating.  Even if we were to see that a private school model is as good or a little bit better than the comparable public model, lessons and insights from that model aren’t enough to transform an education system.  They might provide inspiration and guidance on where to start, but that is not enough.
That said, if a particular school model is innovating and producing the same or slightly better results at one-third the cost (as we see, for example, in Andhra Pradesh, India ), or at half the cost (as in the case of Bogota, Colombia’s concession schools) of what is being provided by comparator schools in the public system, results achieved by charging only a few dollars a month per student, then there is a lot of space there for finding out what it would take to go from that minimal standard to a higher standard.
In most education systems in low-income countries, sometimes 90%, sometimes up to 97% of the public education budget goes toward salaries. In such circumstances, there is very little space left for doing anything innovative, for doing any research and development that would help us understand the learning process. However, if we can find discover and learn from models that provide similar results at one-third the cost of doing things the traditional way, then that frees up a lot of resources that could go into finding out what works.
Such an exercise wouldn’t be about cutting funding for public education, it would be about figuring out how to better allocate the scarce funds that we’re already spending in ways that bring about better results for the children, families and communities in the public education system. Whether the models and insights come from public or private providers of education, we should be open to lessons that will help improve and strengthen a country’s education system.
While we are learning more every day in this regard, this will require a lot more research. Stay tuned.   
Follow the World Bank education team on Twitter: @WBG_Education


Join the Conversation

July 16, 2014

Agreed Harry. I think about this on a daily basis. How do we improve the quality of education? Ideas that originate from anywhere which can influence and impact on quality should be taken seriously. Your point about the personnel bill or salary bill is a serious challenge in developing countries. There is little to go around after that in view of the high expenditure. The problem is quality. Huge wage bills, a lack of innovation and the inability of the system to move forward quickly enough is the challenge. Ideas from the private sector should be welcome. For countries to progress there has to be something radically different from the current scenario of massive state expenditure and quality that we are not happy about. As the world moves forward, we need to think innovation and rupture current practices since they do not seem to work for the majority of poor children. We need imagination in education to move the system forward. If I were Minister of Education in a system where there is a 80% wage bill, I will deploy staff to the most needy areas of education. I will cut the bureaucracy to 50% of its current size and use the most innovative people in the areas where they are needed the most. I will leave well functioning schools to manage their own affairs and concentrate on those where the results are poor. Drawing on any kind of innovation to improve the lot of the poor

Harry Patrinos
July 17, 2014

Thanks Sigamoney, well said. I wish everyone thought about targeting resources to the poor. The thing is that we do think about it, but we don't always have the information to make it happen. Hopefully, the information/data revolution will help us get the targeting right, along with evidence about what works, then we can make a difference. I like your point about imagination. In other words, we need to be creative.
Thanks again,

George Psacharopoulos
July 17, 2014

OK, Harry, but take it easy on regulations. They can be abused by petty politicians and bureaucrats chocking the private sector. Accountability is better: "This is what I want and you will be judged on whether you achieved it or not. And I am not going to regulate you on how to achieve it."

Harry Patrinos
July 17, 2014

Thank you George. Regulating for outcomes is the way to go. I agree.

July 17, 2014

Outstanding article, Harry. Check out Schools That Can (schoolsthatcan.org), a network of high performing public, private, and charter schools serving primarily low income, minority children in the US. They have a model of cross-sector collaboration that produces high quality results. The key to expanding this success is for the funding side, preferably through philanthropy funding the model and government funding student vouchers, to recognize and work with this model of success. There are many lessons to be learned from their methodology that could be applied anywhere. You might also check out this study for a view on what the private education market can learn from the charter school sector: http://bit.ly/U3sJoN. Thanks for your great work, Harry!

Harry Patrinos
July 17, 2014

Thank you Leslie. I will check out those links. I look forward to the lessons from charter schools.