APRIL 2010
Non-State
Education and
Public-Private
Partnerships
Background Report
Prepared by UNICEF and
ADB for the ADB-UNICEF
Workshop on “The Role
of Non-State Providers in
Delivering Basic Services
for Children”
DRAFT
NOT FOR CITATION
Disclaimer
This draft paper was developed by Norman LaRocque, Education Specialist, Southeast Asia
Regional Department, Asian Development Bank and Sena Lee, Consultant, East Asia and Pacific
Regional Office, The United Nations Children's Fund for the joint UNICEF-ADB workshop on
“The Role of Non-State Providers in Delivering Basic Services for Children.” Commentaries
represent the personal views of the authors and do not necessarily reflect positions of the United
Nations Children‘s Fund or the Asian Development Bank.
TABLE OF CONTENTS
I. Introduction ............................................................................................................................................... 1
Background ............................................................................................................................................... 1
Objectives of the Paper............................................................................................................................. 1
II.
The Context ...................................................................................................................................... 2
Education and the Obligations of the State .............................................................................................. 2
Education Trends and the Private Sector in EAP ...................................................................................... 6
III.
The Role of Public-Private Partnerships in Education.................................................................... 19
Public-Private Partnerships Defined ....................................................................................................... 19
Potential Benefits and Risks of Public-Private Partnerships ................................................................... 20
Models of Public-Private Partnerships With a Focus on Those Targeting the poor ............................... 24
IV.
Making Public-Private Partnerships Work: Regulation and Implementation ................................ 35
Fostering a Vibrant Private Education Sector ......................................................................................... 35
Designing and Implementing Public-Private Partnerships...................................................................... 37
V.
UNICEF/ADB and Public-Private Partnerships in Education .......................................................... 38
VI.
Moving Forward ............................................................................................................................. 40
I. INTRODUCTION
BACKGROUND
Today, access to education is widely recognized as a basic human right, both an important end in itself
as well as means to achieving the Millennium Development Goals (MDGs). The role of the State in
delivering that right is legally codified in their commitments to the international rights treaties.
However, governments face persistent constraints in ensuring the financing and provision of services of
sufficient quality in an equitable manner. As a result, there has been increasing call for a wide range of
private providers, whether it is for-profit entities, non-governmental, community-based, or faith-based
organizations, to play an active role in education. The growth of the private sector has been fuelled, on
the one hand, by conscious policy design and, on the other, by voluntary, demand-driven factors related
to increased access and better quality education. The private sector has come to play a significant role
in providing education to the poor.
Private education has a long history – in some cases, pre-dating state provision. While the growth of
private sector provision brings new opportunities for governments, it also brings new challenges. In
particular, governments face questions about the implications of increased private sector provision for
the universality, affordability and quality of education. Available evidence suggests the great potential
of private sectors to contribute to overall progress in education, resulting in broader coverage and
enhanced efficiency in education, particularly in reaching those underserved by public systems. At the
same time, governments need to ensure that private sector engagement promotes pro-poor, equitable
provision.
This paper explores the issues, challenges and opportunities related to non-state provision and the
scope for partnerships between the public and private education sectors, particularly for the poor. An
underlying theme is the changing role of the State – from funder/provider to funder/enabler of
education. The report discusses the potential for Public-Private Partnerships (PPPs) to successfully
engage and support the private sector in enhancing educational opportunities for the poor. While the
focus is on East Asia and the Pacific (EAP), the report also highlights examples of PPPs drawn from other
parts of the world. 1
OBJECTIVES OF THE PAPER
The purpose of this paper is to identify key issues, opportunities and challenges related to private sector
providers and their partnerships with the State in fulfilling the rights to education for all in East Asia and
the Pacific (EAP). While recognizing the State as being ultimately accountable for the equitable provision
of education services, the paper discusses the challenges to traditional means of schooling, funded and
provided solely by the State, and discusses the potential shifts in the role of the State vis-a-vis that of
private sector that could be considered. The paper then highlights a range of PPP models in education,
benefits and risks commonly associated with them, and essential factors to establishing successful
partnerships. Particular emphasis is made on key considerations for the design and implementation of
1
In UNICEF's demarcation, East Asia and the Pacific is represented by one region. Under ADB's demarcation,
East Asia and the Pacific includes three regions: (i) East Asia, (ii) Southeast Asia, and (iii) Pacific.
1
effective PPPs that contribute to equitable, quality delivery of education, especially for the poor. Lessons
and potential areas for support by UNICEF, ADB and development partners in advancing the partnership
agenda for equitable educational opportunities will also be discussed.
II.
THE CONTEXT
EDUCATION AND THE OBLIGATIONS OF THE STATE
In recent decades, basic education has been a key area of policy focus for governments given the widely
accepted view that basic education generates positive externalities, that is benefits that not only accrue
to individuals concerned but also to society at large. Although not a pure public good, basic education
does exhibit certain neighborhood effects in the likes of social cohesion, economic growth and law and
order, which may justify government finance of education.2 Furthermore, education is considered to
have instrumental value as the principal means of achieving other development goals, such as
enhancing maternal and child health.
At the same time, the rights-based view of education has flourished, in recognition that education
directly relates to the enjoyment of a quality life, external to its effect on economic productivity.
Amartya Sen aptly described that:
“It would be a mistake to see the development of education, health care, and
other basic achievements only or primarily as expansions of ‘human
resources’- the accumulations of ‘human capital’- as if people were just the
means of production and not its ultimate end. The bettering of human life
does not have to be justified by showing that a person with a better life is also
a better producer.” 3
Today, the right to basic education is expressed in the Universal Declaration of Human Rights (1948) that
has served as a foundation upon which the substance of the right has been translated into numerous
international legal and political commitments that followed.
The normative framework for the right to basic education is essentially contained in Article 4 of the
Convention against Discrimination in Education (1960). With regards to basic education, the Convention
holds the State Parties, as signatories to the law, responsible for the obligation:4
a) To make primary education free and compulsory; make secondary education in its different
forms generally available and accessible to all;…assure compliance by all with the obligation
to attend school prescribed by law;
Friedman, Milton. 1955. "The Role of Government in Education", in Economics and the Public Interest, ed.
Robert A. Solo, Rutgers University Press.
3 Sen, A. 1997. “Radical needs and moderate reforms,” in Indian Development: Selected Regional Perspectives,
edited by J. Dreze and A Sen, Oxford University Press, New Delhi, India.
4 Daudet, Y. and K. 2001. “The Right to Education: An Analysis of UNESCO’s Standards-Setting Instruments”,
UNESCO, Paris.
2
2
b) To ensure that the standards of education are equivalent in all public education institutions
of the same level, and that the conditions relating to the quality of the education provided
are also equivalent;
Provisions for education rights are also upheld in the International Covenant on Economic, Social and
Cultural Rights (1966) and the Convention on the Rights of the Child (CRC) (1989). Similar to the 1960
Convention, Article 28 of the CRC requires the State Parties to recognize the right of the child to
education and to realize the right on the basis of equal opportunity, including through free and
compulsory primary education and “available and accessible” secondary education for every child.
Since the adoption of these legal treaties, political commitment in reaffirming education as a basic
human right was also made through the World Education Forum, setting out six goals of Education for
All (1990, 2000) pledged by 155 countries worldwide.5 The Millennium Declaration (2000) marked
similar political commitment for the right to development, including six commitments for the promotion
of human rights.6 Despite certain limitations of these commitments to address issues of disparities and
quality of outcomes, they represent the political commitment imparted to the normative framework for
the right to education as established by the international conventions.7 Quantifiable and time-bound,
the goals and objectives provide useful guiding points to measure progress of realization key rights.
Pragmatic approaches to fulfilling the right to education
Together, the international conventions and commitments provide the legitimate legal basis to assert
the State as the ultimate guarantor for ensuring the fulfillment of the right to education. However, in
practice, the State faces persistent budgetary and institutional constraints that plague both the
coverage and quality of its education services. This, coupled with the increase and diversification of
demand for education, has resulted in a wide range of private actors to complement and/or supplement
the State’s provision of education services.8 In effect, education systems funded and provided solely by
the State have become rare, and in the East Asia and Pacific region, a range of private providers are
actively engaged in service delivery, catering to diverse groups of communities and to varying degrees of
formality with the State.
Thus, it is useful to consider the role of the State as not only a provider but also as an enabler of services
in the fulfilment of rights. In this respect, the following elaboration- from a recent UNICEF position paper
5
6
7
8
Education for All Jomtien (1990) and Dakar (2000).
Millennium Declaration (2000)
Some critics argue that MDGs emphasizes numerical targets and goals at the expense of quality of outcomes
and limited attention to women and marginalized groups. See Concept Note: MDGs and Human Rights.
Office of the High Commissioner for Human Rights.
With the advancement of the EFA agenda, the demand for education has outpaced supply in many
developing countries. Quality of education services also varied, and insufficient quality of public systems
stimulated the growth of private schools where “differentiated demand” for quality exists, whether it is for
the elite or those with special demands (religious, ethnic, linguistic, etc). For more details, see summary of
E. James’ writings in Sosale, Shobana. Trends in Private Sector Development in World Bank Education
Projects. The World Bank.
3
regarding providers of basic services- regarding the obligations of the State to respect, protect and fulfill
the enumerated rights is noteworthy:9



The obligation to ‘respect’ requires States to refrain from interfering directly or indirectly with
the enjoyment of the right. For example, the State cannot pass a law that does not provide for all
children to go to school.
The obligation to ‘protect’ requires States to take measures that prevent third parties i.e., nonState actors from interfering with the right. For example, the State is obliged to respond by law
to violations of children’s rights, such as the case of a child being excluded from school by a third
party.
The obligation to ‘fulfill’ requires States to progressively realize the enjoyment of all rights. This is
particularly related to socio-economic rights where realization is very dependent on the provision
of basic social services. For example, the State has to provide adequate and effective education
to all.
Non-state provision
While the State bears the responsibility to guarantee the rights, the legal commitments does not
necessarily presuppose government provision of education services. Instead, the primary role is to
“respect” the right and “protect” it from violation. For example, in many countries globally, the State
may allocate aspects of the education system, such as inspection, teacher training or school feeding, to
non-state providers, either as a cost efficiency measure ort o improve quality. Thus, in cases where
alternative private providers are engaged in providing education services and meeting established
criteria and standards, the State should not prevent these actors from service provision as it would
constitute as interference with the enjoyment of the right. Instead, the State’s obligations to “protect”
and “fulfil” requires the State to regulate and monitor so that the services contribute to genuine
fulfilment of the right to quality education, regulating and monitoring to ensure appropriate standards
and equality of opportunities.10
Non-state financing
On the other hand, the issues surrounding the financial obligations of the State are less straightforward,
particularly at the primary education level. Both the CRC and the 1960 Convention explicitly hold the
State accountable for “free and compulsory” primary education, and numerous initiatives such as the
World Bank/UNICEF School Fee Abolition Initiatives catapulted the advocacy efforts to help State Parties
put this into practice. The failure to provide universal free primary education would constitute as
violation of immediate and core obligations for providing primary education free of charge.11
Nevertheless, user fees in primary education are not only common but also represent as much as 20
percent of all education spending in many developing countries. 12 Most States, regardless of how wellintentioned they are, resort to some level of cost recovery to fill the revenue gaps resulting from
abolition of tuition fees, particularly as they try to expand coverage. In Lao PDR, for example, tuition
UNICEF. Submission to the UN Committee on the Rights of the Child Day of Discussion on the Private sector
as service provider and its role in implementing child rights. September 2002.
10
Ibid.
11 General Comment No. 13 on the Right to Education??
12 World Bank. 2004. “School Fees: A Roadblock to Education for All,” Education Notes, World Bank,
Washington, D.C. August.
9
4
fees are officially banned, but most schools still levy a contribution, and in Indonesia, the fee-free policy
is optional with some incentives provided for those who eliminate fees.13 States also face the difficult
choice of budget allocation among other basic social services, such as health and infrastructure, as well
as different levels of education from early childhood up to university. In effect, whether in the form of
direct tuition fees to schools or indirect fees like supplies and uniforms, household contributions have
become essential components of overall education financing in most countries.
High levels of user fees raise equity concerns as they inevitably impose a barrier to access for the poor
who cannot afford to pay for services, unless strong systems for subsidies and state payments are in
place. However, moderate levels of fees targeting the non-poor can be crucial resources for the
expansion of services and its prevalence points to the existence of some level of private demand and
willingness to pay for education, which may not be surprising as education has private benefits that
accrue to individuals. In fact, in a 1996 report prepared in collaboration with the World Bank, UNICEF
highlighted the importance of community contributions towards education.14 Community management
is essential, and family engagement and support of schools is often a sign of their health. What is clear,
however, is that no child should be excluded from education due to an inability of their families to pay
fees or make mandatory contributions.
In this respect, whether abolition of user fees is the panacea to right to education is increasingly being
questioned. Concerns regarding quality of education contribute to this debate, as experiences of fee
abolition from many countries show that expansion of coverage without complementary investments in
supporting mechanisms has deleterious effects on overall quality of education due to overcrowding,
limited supply of trained teachers, etc. 15 In particular, overall quality can be critically compromised if
revenue loss is not countered by increased government investments to maintain sufficient levels of
discretionary funding used for school supplies and effective operations.
Another related argument is that equity concerns are not unique to user-financed education. The way
public education is financed has great implications on equity, and in cases where services do not reach
the poor, public spending can be highly regressive in effect. 16 This is particularly true in higher grades of
primary education and in secondary education, where lower participation rates among the poor result in
higher proportional state spending on the wealthy. Thus, some argue that a user fee policy that exempt
the poor can, in fact, enhance equity, by increasing public expenditure to expand coverage without
taking away investments towards overall quality improvements. Also, in cases where the only form of
education available to the poor is a fee-based one, a policy that categorically bans operation of schools
solely on the basis of fees- however modest- could result in denial of access to services and a violation of
right to education for the child.
It is useful, therefore, for the State to consider a pragmatic approach to the progressive realization of
the right to quality education for all than to emphasize the unrealistic ideals of free universal education
in the immediate term. As concluded in a recent UNICEF paper on the role of the Non-state Actors, “it is
13
Ibid
See Bray, M. 1996. " Counting the Full Cost: Parental and Community Financing of Education in East Asia."
Washington DC: The World Bank in collaboration with UNICEF.
15 Kattan, R. B. and N. Burnett. 2004. User Fees in Primary Education, World Bank, Washington, D.C.
16 See Colclough 1996. Education and the Market: Which Parts of the Neoliberal Solution are Correct? World
Development 24 (4); Rose 2003. “Communities, gender and education: Evidence from sub-Saharan Africa.
Background paper for 2003 UNESCO Global Monitoring Report
14
5
unrealistic to expect governments to achieve universal coverage quickly,” and the progressive
realization clause aims to “give flexibility and recognize their varying levels of economic status and
capabilities.”17 This recognition includes working with all available resources to help fill the gap in access
and quality left by State provision, including those of private sector providers, but not as permanent
substitutes; the ICESCR calls for “immediate deliberate, concrete and targeted steps towards the effort
to meet the various obligations set forth.”18
With public resources consistently failing to meet the demands of access to quality basic education, the
failure of States to leverage the existing resources of private sectors can be costly. To be sure,
participation of private sector in education can raise different types of issues and challenges for the
State, as they require shifts in the roles and responsibilities of the State vis-à-vis the private sector.
However, effective partnerships can maximize potential rewards and minimize risks in the advancement
of the right to education.
EDUCATION TRENDS AND THE PRIVATE SECTOR IN EAP
Education for All Progress and Challenges:
The developing countries in the EAP region are characterized by diverse economic, political, cultural and
ethnic makeup, between and within countries. It encompasses some of the most populous nations in
the world, such as the People's Republic of China (PRC), as well as some of the smallest, like the Pacific
Island states. Economic status also varies, with countries like the PRC undergoing robust rates of
growth, while others like Cambodia, the Philippines and Myanmar has experienced relatively modest
growth with disruptions from political conflict and natural disasters. The Human Development Index
(HDI), an aggregate measure of literacy, life expectancy and real GDP per capita, spans a wide range
across the region, with Thailand (87), PRC (92) and Fiji (108) ranking much higher than Myanmar (138)
and Timor-Leste (162).19
Disparities in access
The diversity of the region (Table 1) presents limitations on the extent to which the progress of and
issues related to education can be generalized. Indeed, while the region is often recognized to have
achieved remarkable progress towards EFA goals, large variations exist across different countries.
Under-5 mortality rates are stands well below the world average, at around 28 per 1,000 births, but the
figures for Cambodia, Myanmar and Timor-Leste are over 85. 20 Children in those countries also have
higher rates of underweight and stunting. Overall progress towards universal primary education (UPE)
has been steady, and since 1999, and Cambodia, Myanmar and the Lao PDR have made substantial gains
in reducing the number of out-of-school children. However, access remains elusive to over 9 million
primary school age children, 3.5 million more than in 1999, and the un-enrolled population is
concentrated mainly in the Philippines, Indonesia, Cambodia and Thailand. 21 The gross enrolment rate
(GER) in pre-primary schools remains virtually unchanged since 1999, with consistently low participation
UNICEF. 2009. Fulfilling Child Rights: What Role for Non-State Actors?, Draft paper.
Ibid.
19 Human Development Report 2010. Available at http://hdr.undp.org
20 For basic statistics, see www.childinfo.org
21 UNESCO Global Monitoring Report for EFA, 2009.
17
18
6
of less than 10 percent observed in countries like Myanmar, Timor-Leste and Cambodia. In some
countries, however, pre-primary enrolment rates have more than doubled since 1999, as in the case of
Indonesia. Transition to lower secondary education, including both general and vocational/technical
education, has seen only modest gains and is now at the center of the EFA agenda in many countries in
the region (GMR 2009).
Table 1: Selected Education Indicators, East Asia and the Pacific, 2008
Under-5
mortality
rate,
2008
Total
population
(thousands),
2008
GNI per
capita (US$),
2008
Primary
NER 2003–
2008*, male
Primary NER
2003–2008*,
female
Secondary GER
2003–2008*,
gross, male
7
392
26740
93
93
96
99
Cambodia
90
14562
600
91
87
46
38
PRC
21
1337411
2770
100
100
75
76
Democratic
People's Republic
of Korea
55
23819
a
-
-
-
-
Indonesia
41
227345
2010
97
94
66
66
Kiribati
48
97
2000
96
98
82
94
Lao PDR
61
6205
750
86
81
49
38
Malaysia
6
27014
6970
99
99
66
72
Myanmar
98
49563
220
-
-
49
49
Papua New Guinea
69
6577
1010
-
-
-
-
Philippines
32
90348
1890
91
93
79
88
Solomon Islands
36
511
1180
62
62
33
27
Thailand
14
67386
2840
94
94
79
88
Timor-Leste
93
1098
2460
64
62
53
54
Vanuatu
33
234
2330
88
87
43
37
Viet Nam
14
87096
890
96
91
69
64
East Asia and
Pacific
28
1996426
3136
98
97
73
74
Brunei Darussalam
Secondary
GER 2003–
2008*,
female
Source: UNESCO UIS
Furthermore, disparities in education progress are pervasive within countries. The Asia-Pacific EFA MidDecade Assessment process, with the theme of Identifying Disparities: Reaching the Unreached, resulted
in 47 National Reports being prepared with disaggregated data prepared on specific indicators. In
general, measuring marginalization in education is fraught with challenges, with a wide range of factors
such as poverty, gender, language, ethnicity, and geographical isolation all acting as disadvantages
affecting a child’s access to schools. In many cases, children experience multiple levels of disadvantage
that interact together to limit their genuine opportunities to access quality education.
7
A lack of common benchmarks also makes cross-country comparisons difficult. However, where
available, sub-national data do provide insight into the relative scale of disparities within countries.
Survival rates within countries vary considerably by geographic location and income levels. As seen in
Figure 1, in Cambodia, the average rates of survival to grade 5 for Ratnak Kiri and Mondul Kiri are nearly
half those of Kampong Chhnang. In Vietnam and the Philippines, survival rates of the poorest
population group are lower by more than 15 percent than those of the richest.22
FIGURE 1: SURVIVAL RATE TO GRADE 5, BY PROVINCE IN CAMBODIA, 2006/07
Source: EMIS Ministry of Education Youth and Sports
Amongst the most pervasive of disparities are those linked to poverty, which is consistently rates as one
of the major factors in non-attendance at all levels of education. Among populations aged 17-22, those
born into the poorest households have disproportionately high representation among those in
“education poverty,” defined as having fewer than four years of education.23 In Cambodia and
Myanmar, for instance, the poorest quintile account for more than double their population share in
education poverty.24 Similarly, as seen in Table 2, the poorest income quintile is also disproportionately
represented in the bottom 20 percent of education distribution (by years in school). In the Philippines,
22
Viet Nam 2002 Demographic and Health Survey; Philippines 2003 Demographic and Health Survey.
2010 EFA GMR.
24 In the absence of established cross-country benchmarks, the 2010 EFA Global Monitoring Report introduces
three core areas (education poverty, extreme education poverty, and the bottom 20%) to identify groups
facing restricted access to educational opportunities. See the Report for more information.
23
8
for example, over 55 percent of those in the bottom 20 percent of the education distribution is from the
poorest wealth quintile.
TABLE 2: EDUCATION POVERTY IN SELECT EAP COUNTRIES
Country
Most Deprived Region
Cambodia
Lao PDR
Viet Nam
Easter Shan
South
Mekong River Delta
Autonomous Region of
Philippines
Muslim Mindanao
Indonesia
West Kalimanta
Source: EFA Global Monitoring Report 2010
Share of the poorest wealth quintile in
the bottom 20% of the education
distribution, by years in school
36.3
34.6
51.0
55.4
41.1
Poverty-based barriers are particularly pronounced at the pre-primary level, with children in Vietnam’s
poorest 20 percent of households being nine times less likely to participate in pre-primary programs
than children in the wealthiest 20 percent; the corresponding rate in the Philippines is twelve.25
Disparities in the Quality of Education
With regards to overall quality of education, high rates of grade repetition and low rates of grade-5
survival point to the need for increased investment towards improving inputs and teaching and learning
processes. And similarly to access, inequity in quality of education at all levels remains a major
challenge across the region. According to the results from the 2007 Trends in International Mathematics
and Science Study (TIMSS), the average test scores for students in the region’s top-performing country,
the Republic of Korea, were 1.5 times higher than those in Indonesia, the poorest performer in the
region.26 Quality of learning environment widely varies within education systems, with marked
variations in class size, teacher quality, availability of teaching and learning materials and facility
standards. Gap between urban and rural areas are prominent in many countries, with shortage of
trained teachers and inadequate quality of facilities being persistent in rural areas. Data on learning
achievement assessments suggest inequalities based on socio-economic status, ethnicity and
geographical location influencing overall learning achievement. In Vietnam, for instance, a large scale
survey found strong disparities in learning achievement among different groups, with ethnic minority
students from predominantly poor, remote communities showing limited reading competencies than
those from middle-class backgrounds in urban areas.27
As previously mentioned, the poor often face multiple levels of bias, making the last remaining out-ofschool children also the hardest-to-reach. Inequalities they face tend to be persistent and resistant to
change, and strategic and targeted investments are needed to improve their overall education
Regional Overview: East Asia and the Pacific 2010 EFA Global Monitoring report.
Seven countries in the East Asia and Pacific region were surveyed in 2007 TIMSS, including Australia,
Indonesia, Japan, Malaysia, the Republic of Korea, Singapore and Thailand. See EFA GMR 2010 for more
details.
27 Vietnam Reading and Mathematics Achievement Study. 2001. Vietnam Ministry of Education and Training.
25
26
9
opportunities. Based on the experience of the East Asia 1997 financial crisis, the situation for the poor
in the aftermath of the current crisis is expected to worsen, making it more imperative to identify and
implement effective social protection measures, grounded on continued political commitment to
ensuring every child’s basic right to education.
Scale and nature of private (non-state) providers
Who are private providers?
Before discussing the scale and nature of private providers in education, it is important to define what is
meant by “private” providers. In this paper, the term “private” providers encompasses the whole range
of non-State providers of education services, including for-profit entrepreneurs operating individual
schools, for-profit school chains, faith-based and community based organizations, NGOs, and
philanthropic associations engaged in the provision and/or financing of education services (Table 3). As
summarized in the table below, the type of intervention covers a wide range, whether it is in the form of
support to government service delivery or direct service delivery. While it is commonly assumed that
for-profit institutions comprise the biggest share of private education provision, the opposite is true in
many developing countries, with non-profit, civil society organizations accounting for the biggest
share.28 These include private schools that are operating on non-commercial interests, designed to
reach under-served communities as well as those with differentiated target groups (e.g., linguistic
communities, ethnic groups).29
Table 3: Summary of types and forms of private (non-state) provision in education
Types of Providers
Forms of non-state provision

NSP support for government service delivery





Commercially-driven private entrepreneurs
operating individual schools
Commercially-driven private school chains
NGOs
Faith-based organizations
Philanthropic associations
Spontaneous community-based organizations

Supply inputs to government schools (e.g. learning
materials, school feeding)

Support to infrastructure development of government
schools (e.g. school buildings)

Support to management of government- run schools

Regulation and quality control of associated services (e.g.
inspection, teacher training and certification)
NSP service delivery




Manage and run government schools
Establishment and operation of non-state schools
Private tuition to supplement government provision
Receiving state funds to provide schooling to specific groups
of children
Source: Rose 2007.30
At an institutional level, UNESCO classifies an institution “private” if it is controlled and managed by a
non-government organization. 31 While this definition relies on governance criteria, others also use
UNESCO. Global Education Digest 2007. UNESCO Institute of Statistics.
Ibid.
30 Rose, P. 2007. Supporting Non-State Providers in Basic Education Service Delivery. Research Monograph
No.4. DFID
28
29
10
financing criteria that differentiate private education based on source of funding; those receiving more
than half of their budget from the state are classified as “government-dependent” and others as
“independent” (Figure 2).
FIGURE 2: SOURCES, FLOWS AND DESTINATION OF EDUCATION FUNDING
Source: UNESCO-UIS/OECD/WEI, 2003. Financing Education: Investments and Returns, Montreal: UNESCO
Institute for Statistics
The variations in the use of the term highlight the complexity of determining the public and private
spheres in education, and the limited consistency in usage of the terms across countries require caution
in the interpretation of information over time as well as in cross-country comparisons. For the purposes
of this paper, the governance criteria used by UNESCO will be used to define “private” institution.
Enrolment
The significance of the private sector in overall education delivery can be determined by the size and
nature of their participation as well as the scope and provisions of the regulatory framework within
which they operate. For the most part, reliable data and information related to private providers are
limited in the EAP region, rendering it difficult to capture the true picture of the nature of private sector
participation. Nevertheless, available data indicate notable significance of private providers, partly
stimulated by government policies that recognize and encourage their contribution through enabling
legislations and financial incentives.32 Even without supply-side interventions, private providers also
spawned in response to unmet demands, both for the elite class as well as for underserved rural and
ethnic communities.
31
32
UNESCO 2005. World Education Indicators. Montreal: UNESCO Institute of Statistics.
World Bank and UNICEF. 1996. Counting the Full Cost: Parental and community Financing of Education in
East Asia. World Bank, Washington, D.C.
11
As seen in Figure 3, the average share of private enrolment in the EAP region is comparable to that in
other regions for primary education. As with all regions but South Asia, the private enrolment share is
higher in secondary education than in primary education in EAP.
FIGURE 3: PRIVATE ENROLMENT SHARE BY REGION, 2006
Source: UNESCO, WORLD BANK EDSTATS, GLOBAL MONITORING
REPORT 2010
The relative significance of private sector participation varies across the region, with private sectors
highly active in countries like Indonesia, Philippines and the Pacific Islands, as compared to the relatively
modest levels in Myanmar and Lao PDR. As shown in Figure 4, enrolment in private schools is significant
for all levels of education in Indonesia, Thailand and some Pacific Island countries. Also evident is the
significance of private sector engaged at the pre-primary level, and to a lesser degree, at secondary level
in most countries. For six countries, the level of private school enrolment is the lowest in the primary
level, but even in those countries, the proportion of private enrolment is very high at pre-primary and
secondary level. This is the case for Cambodia, Lao PDR and Vietnam. The private sector is also active in
secondary education, with over 25 percent of total enrolment in private schools in Indonesia, Tonga and
Marshall Islands.
In some countries, private sector engagement is based on systemic alliances formed with the
government, whereby a large share of education is provided by the private sector but remain under
public financing and/or ownership. An example of such alliance is the madrasahs (Islamic institutions) in
Indonesia, which account for approximately 6 million school-age children, or about 20 percent of
primary enrolment.33 Madrasahs are managed by private, non-governmental providers but are under
public oversight by the Ministry of Religious Affairs34. Similarly, in Papua New Guinea, the proportion of
schools managed by churches is estimated to be around 50 percent in primary level and 30 percent in
secondary level, although the level of State engagement, in terms of funding and legal provisions, is not
33
34
Indonesia Education Strategy 2007-2012. Ministry of Religious Affairs.
Ibid.
12
as strong as in Indonesia.35 In the Philippines, nearly half of all private secondary schools are operated by
the Catholic Church or the Association of Christian Schools and Colleges.36
FIGURE 4: PRIVATE SCHOOL ENROLMENT AS % OF TOTAL ENROLMENT IN EAST ASIA AND PACIFIC
(2007)
Pre-primary
Primary
Secondary
100
75
50
25
Japan
Australia
N ew Zealand
Brunei
R ep. of Korea
Palau
C ook Islands
Malaysia
Mar shall Islands
Thailand
Samoa
Tonga
Philippines
Indonesia
Mongolia
PNG
Viet Nam
Lao PD R
C ambodia
0
Source: EFA Global Monitoring Report 2008. UNESCO.; The State of the World’s Children 2008. UNICEF; World
Development Report 2008. The World Bank; Basic Statistics 2006- Developing Member Countries. Asian Development
Bank.
Overall, while information on the exact scale and nature of private schools- the types of providers,
funding mechanisms, and distribution of service by income/region- is not readily available, the above
estimates provide a useful starting point to recognizing the relative significance of the private sector in
the region.
Private schools and the poor
While private schools are often seen as bastions of the elite, the reality is that a large and growing
proportion of the private sector in education serves the poor. Several studies have documented the
emergence of low-cost schools serving the poor. Kingdon (1996) reports on a household survey in rural
India that found that about 10 per cent of children were enrolled in private unaided schools.37
Alderman, Orazem and Paterno (2001) find significant enrolment in private schools among poor families
in Lahore (Pakistan), with 37 percent of surveyed children from the lowest income quintile enrolled in
private schools. Only among the poorest families was the proportion of students enrolled in public
Gibbs, P. 2002. “Religion and religious institutions as defining factors in Papua New Guinea politics.”
Development Bulletin 59.
36 UNESCO-UIS/OECD/WEI, 2003.
37 G. Kingdon: 1996. Private Schooling in India: Size, Nature and Equity Effects, London School of Economics
STICERD Working Paper 74, London, August.
35
13
schools higher than in private schools.38 Salmi (1998) highlights the vast majority of private schools in
Haiti operates at the bottom of the market, with only a small proportion of (mostly religious) schools
operating at the elite end of the education market.39 The Oxfam Education Report (2000) has noted that
private schools serve a much broader group of people than just the elite and that low-cost private
schools have emerged to meet the demand of poor households.40 According to the World Bank, onequarter of the private schools in Lahore
The notion that private schools are servicing the needs of
(Pakistan) were charging less than $20 per
a small minority of wealthy parents is misplaced.
annum and more than half the families in the
lowest income group were choosing private
- Oxfam Education Report,
education for their children.41 Postiglione and
2000
Tan (2007) note that private schools in
Indonesia have provided educational
alternatives for the poor and those living in more remote areas and are sometimes the only options for
these students. He also notes that the overwhelming majority of private institutions provide
educational services for those who would otherwise be denied access.42 In their 2005 study, Tooley and
Dixon found that private schools made up anywhere from 65.1 percent to 74.7 percent of schools
serving the poor in the slums of Hyderabad (India), Ga District (Ghana) and Lagos State (Nigeria).43
Finally, the size and growth of PPP programs such as the Punjab Education Foundation's (PEF)
Foundation Assisted Schools (FAS) program, which are targeted at children from low income families
attending private schools, is further evidence of the degree to which the private sector serves the poor.
Expenditure
As a whole, the East Asia and the Pacific region has the second highest share of global public
expenditure on education (18 percent). While this appears significant, it is considerably less than its
share of global wealth (28 percent of GDP) and the school-age population (29 percent) and is
approximately about 1 percent of GDP, on average, compared to 1.5 percent in North America and
Europe and 1.3 percent worldwide.44,45 Private expenditure on primary and secondary education is
estimated to be notably high in the region, due to prevalence of private schools and various types of
user fees in the public school sector, whether in the form of direct tuition fees or indirect fees such as
cost of uniforms and textbooks. While it is generally true that most spending goes towards private
education institutions, private financing of public education is also common in the region.46
Systematic data on private expenditure for East Asia and Pacific countries is limited, and, where
available, not disaggregated by types of spending. However, available data on its share of total
Alderman, H. et al. 2001. School Quality, School Cost, and the Public/Private School Choices of Low-Income
Households in Pakistan, The Journal of Human Resources, pp. 311-312.
39 Salmi, J. 1998. Equity and Quality in Private Education: The Haitian Paradox, Technical Paper 6, World
Bank, p. 29.
40 Watkins, K. 2000. The Oxfam Education Report, Oxfam Publishing,
41 World Bank: Pakistan: Improving Basic Education, South Asia Region, 1996.
42 Postiglione, G and J. Tan. 2007. Going to School in East Asia, Greenwood Press, Westport CN, p. 129.
43 Tooley, J. and P. Dixon. 2005. Private Schools are Good for the Poor, Cato Institute, Washington DC, p. 8.
44 Global Education Digest. UNESCO UIS. October 2007.
45 Ibid.
46 For more information on examples of countries where private financing in a publicly provided system is
common see Bray, Mark. 1996. Decentralization of Education: Community Financing. Directions in
Development Series. World Bank, Washington, D.C.
38
14
expenditure on education suggest the relative significance of the private sector. As seen in Figure 5,
private expenditure contributes a large percentage of total expenditure on primary to post-secondary,
non-tertiary education level in Indonesia and Lao PDR, higher than the relatively affluent countries like
Japan. This contradicts the popular notion that private education is not prevalent in low-income
countries.
FIGURE 5: PRIVATE EXPENDITURE AS A PERCENTAGE OF TOTAL EXPENDITURE
ON PRIMARY TO POST-SECONDARY, NON-TERTIARY EDUCATION
INSTITUTIONS FOR SELECT EAP COUNTRIES, 2004
Source: UNESCO UIS
According to one estimate, private financing as a share of total education expenditure is fairly high
throughout most of the region where data is available.47 In Indonesia, over 90 percent of pre-primary
education expenditure is from private sources, and over 56 percent for lower secondary level.48 At
primary education level, private expenditure in Vietnam and Cambodia is as high as 44 percent and 80
percent, respectively.49 According to the 2009 Global Monitoring Report, private expenditure for
primary and secondary level combined constitute nearly 35 percent of total expenditure in the
Philippines.50
The invisible
Data on private enrolment and private expenditure shares provide a rough estimate of the relative scale
of the private sector, but this is likely to be an underestimate of the true scale of the private sector. As
noted previously, many countries do not collect data related to private sector, and even for countries
that do collect data, they do not see it as their responsibilities to collect data on unregistered or
World Bank. 2004. Working paper series on Private Sector Involvement in Education: A review of World
Bank Activities in East Asia and Pacific 1996-2002.
48 Ibid.
49 World Bank. 2004. User Fees in Primary Education. World Bank, Washington. D.C.
50 Global Monitoring Report, 2009. World Bank.
47
15
unlicensed private schools.51 Also, some private schools choose to remain unregistered and thus not in
purview of government, due to certain legal and regulatory hurdles that tend to restrict their
operations.52 In general, there is high likelihood that private sector providers serving low-income
communities are the ones not captured in national data, as incidence of non-registration among private
providers, especially small-scale, NGO-type providers, are relatively high compared to urban, large-scale
private providers.53
Legislation and regulation
Another dimension related to the relative significance of the private sector in education relates to the
spread and enforcement of the legal and regulatory provisions pertaining to private sector participation.
Whether it is related to barriers to entry, standards of operation, regulations for safety and quality, or
tax codes, the depth of regulatory provisions and its actual enforcement suggests the relative “power”
of the private sector in education compared to public sector as recognized by the State. In essence, the
State’s policy ranges from those that prohibit, permit or encourage private sector participation, though
in practice, it varies considerably by types of private provision and providers as will be discussed later in
the paper.
In general, at the pre-primary level, many countries in the region have specific policies encouraging
various private providers to play an active role in the provision of early childhood education (ECE). In
some cases, government encourages cost-sharing, support funding, as in the case of Indonesia where
the Ministry of National Education (MONE) encourages private sector, including for-profit, nonprofit and
community-based organizations, to expand the provision of ECE through block-grant subsidy system.54 In
the Philippines, the Early Childhood Care and Development Law, enacted in 2000, also encourages
private sector initiatives in ECE, with specific guidance and supervision provided through the
Department of Social Welfare and Development acting as the designated body for setting standards and
monitoring all provisions.
At the primary level, policies generally permit but do not explicitly encourage private sector
participation, with many countries regarding primary education as free and compulsory and the
responsibility of the State. In some cases, as in Vietnam and Myanmar, fully private schools are officially
prohibited to act as alternatives to State institutions, though private providers are active in practice.55
Policies for private providers engaged in lower secondary and technical/vocational education levels are
also generally favorable across the region.
Conclusion
Kingdon, G. G. 2005. Private and Public Schooling: The Indian Experience. Paper presented at the Conference,
Mobilizing the Private Sector for Public Education, Co-sponsored by the World Bank, Kennedy School of
Government, Harvard University, October 5-6, 2005.
52 Ibid
53 Literature around the effect of State restrictions on NGO’s on their registration practices is vast. See
documents from the Workshop on the Legal Framework for Civil Society in East and Southeast Asia. .
Available at http://www.icnl.org.
54 Ministry of National Education allocates a share of ECED budget for these block grants, which are disbursed
to private providers in the form of subsidies; the grant covers a part of the operational and start-up costs,
and parents contribute the rest as user fees. See Overcoming Inequality: Why governance matters.
Background paper prepared for the Education for All GMR 2009.
55 Ibid.
51
16
While the exact scale and nature of the private sector is not easy to assess, the relative significance of
private sector participation in education in EAP is undeniable. This is especially true in the case of preprimary and secondary level across the region, and in certain countries, also in primary level. Both
demand-driven needs as well as supply-side interventions are responsible for the growth of private
sector participation, as well as the remarkable household willingness to pay for education.56 Private
enrolment rates are high for both high and low income countries in EAP, which reflects the global rates
by national income as seen in Figure 6.
FIGURE 6: PRIVATE ENROLMENT SHARE BY NATIONAL INCOME, 2006
Source: UNESCO, WB EDSTATS, WB GMR 2009
There is no uniform trend in the scale of private sector provision across the region, by level, as can be
seen in the Table 4. Private enrolment shares have increased for primary education in some EAP
counties, like Thailand, while those of secondary education have seen modest decreases.
Table 4: Private enrollment shares in education, selected countries, 1990 and 2006 (%)
Primary
Country
Indonesia
Philippines
Thailand
1990
17.6
6.7
9.6
Secondary
2006
15.9
7.8
16.7
1990
49.2
36.4
16.2
2006
43.5
20.4
15.0
Source: UNESCO; EdStats (www.worldbank.org/education/edstats).
Note: The table shows most recent data available within two years of the year indicated.
It should also be noted that there is difficulty in understanding the scale of private sector due to the fact
that education institutions are often characterized by a hybrid system, where the government and the
private sector cooperate in mixed arrangements in provision and financing. In practice, the extreme case
56
Numerous empirical studies have shown people of all economic backgrounds are willing to pay for desired
service and cost recovery through fees. See Bray, M. 1996. Counting the Full Cost: Parental and Community
Financing of Education in East Asia. Directions in Development Series. A Collaborative report by the World
Bank and UNICEF. and Psacharopoulos et al. 1997. “Private Education in a Poor Country: The Case of Urban
Bolivia.” Economics of Education Review. 16 (4): 395-406 .
17
of unitary financing and provision by either the government or private sector, as seen in the first and
fourth quadrant, are highly rare as compared to quadrants highlighted in yellow.57 For instance, in
Cambodia, 60 percent of resources for “public” primary education are direct household contributions
rather than indirect contributions through the State, and in Indonesia, over 65% of “private” primary
school funding comes from the State.58 In considering the notion of public and private education, it is
important to distinguish between two different policy instruments that governments have available to
them – that of financier of education and that of provider of education (Figure 6). Governments may
use either to achieve their policy objectives. While schools may be privately owned, governments can
ensure access to the poor by providing public funding to students to offset fees. This is the basis for
many of the PPPs discussed in the next section.
FIGURE 6: FINANCING AND PROVISION OF SERVICES
Provision*
Private
Private
Public
Private schools**
User fees
Home schools
Student loans
Tutoring
Finance
Public
Vouchers
Public schools
Charter schools
Contracting out
Note: *provision includes ownership and management**private schools include for-profit, nonprofit, formal or informal
Source: Adapted from World Bank 2006
Thus, even as debates around the relative efficiency of public versus private schools continue to evolve,
it is more useful to shift away from the false dichotomy of public and private school to a more
meaningful assessment of the range of policy options on financing and provision of education. In
essence, it is rarely a choice between one sector or the other, but choice of different forms of
partnership arrangements between the two sectors. Global evidence on the relative effectiveness and
impact of partnerships is scarce and cannot be generalized across all political, economic, cultural and
geographic contexts. Nonetheless, it is critical to ensure that all forms of partnerships contribute to
enhance equity of opportunities to education, with continued State commitment to “respect”,
“protect”, and “fulfill” the rights to education for all children, particularly the disadvantaged.
57
58
World Bank. 2009. Global Monitoring Report. Chapter 3.
Bray, M. 2002. The Cost and Financing of Education: Trends and Policy Implications. Asian Development
Bank. Comparative Education Research Centre, the University of Hong Kong.
18
III.
THE ROLE OF PUBLIC-PRIVATE PARTNERSHIPS IN
EDUCATION
PUBLIC-PRIVATE PARTNERSHIPS DEFINED
Traditionally, private sector participation in education has largely been in the form of privately-funded
and privately-owned schools and the provision of ancillary services such as the provision of food and
transport services. Recent years, however, have seen the expansion and broadening of the role of the
private sector in education and the introduction of more sophisticated forms of private involvement in
education. Types of engagement of private providers are as diverse and sophisticated as the types of
inputs, processes and outcomes involved in education delivery. Despite the emerging role for the private
sector in education, it receives comparatively little attention of policy makers in developing countries
and of development partners. In many cases, governments do not even measure the size of the private
sector. This cannot and should not continue.
Given the significant educational challenges faced by developing countries and the potential for
increased access, quality, efficiency and accountability offered by increased private participation in
education, it is incumbent upon policymakers to explore innovative ways of financing and delivering
quality education efficiently. PPPs - under which the public and private sectors work together to achieve
desirable economic, social and educational goals – are one such innovation. There are various
definitions of PPPs. (see Box 1 below). While variations exist, most of PPPs share a number of features –
a formal relationship between partners, most often in the form of contracts with defined outcomes for a
specific period of time. It does not matter whether the private sector partner is profit-oriented,
philanthropic, faith-based, or community-based in nature, but in all PPPs, an element of risk-sharing
Box 1: Public-private Partnership Defined
"a risk-sharing relationship based upon an agreed aspiration between the public and private (including
voluntary) sectors to bring about a desired public policy outcome. More often than not this takes the form
of a long-term and flexible relationship, usually underpinned by contract, for the delivery of a publicly
funded service."
-
Commission on UK PPPs
"a cooperative venture between the public and private sector s, built on the expertise of each partner, that
best meets clearly defined public needs through the appropriate allocation of resources, risks and
rewards."
-
Canadian Council for PPPs
"Arrangements whereby the private sector provides infrastructure assets and services that traditionally
have been provided by government, such as hospitals, schools, prisons, roads, bridges, …"
-
OECD
19
exists in the arrangement. The public sector defines the scope of business, targets and outputs, and the
private sector delivers on them based on built-in incentives.59
PPPs are to be distinguished from privatization, with the latter involving a permanent transfer of control
from the public sector to the private sector, while PPPs’ main aim is to promote improvements in the
financing and provision of services without altering the balance of control of one over the other.60
The definition of PPPs employed in this paper involves, for the most part, contracting-type PPPs that
bring together governments and the private sector broadly defined to include both companies and the
not-for-profit sector. However, this definition of PPP is by no means exclusive. To some, these
contracting-type PPPs are more a form of contract than a PPP and do not constitute partnerships in the
true sense of the word.61 Similarly, PPPs are often defined as involving only the government and private
(companies) sectors – thus excluding the non-profit sector. 62 Some definitions of PPP are extremely
narrow. For example, PPP is often used to refer only to Private Finance Initiative-type infrastructure
PPPs. Other definitions recognize that the public sector and a wide range of stakeholders (including civil
society, donor organizations, political representatives, etc) are engaged in many different forms of
interventions and partnership arrangements. While such partnerships may not necessarily be formal,
they are also critical means of achieving educational development. Some broader partnerships are more
formal in nature. Partnerships may involve only a small number of partners. Other partnerships – such
as Multi-Stakeholder Partnerships for Education (MSPEs) – may involve many actors. MSPEs bring
together governments, the private sector, civil society, academic institutions and other organizations to
pool and jointly manage resources and competencies that contribute to the expansion and enhanced
quality of education.63 These can vary considerably in terms of purpose, scope, complexity, level of
engagement, size and diversity of partners.
POTENTIAL BENEFITS AND RISKS OF PUBLIC-PRIVATE PARTNERSHIPS
Economic and rights-based perspectives continue to prevail in the discussions about the role of public
versus private sector’s role in education, and for many, the participation of the private sector in
education is viewed only a short-term solution to inadequate government provision or an experimental
ground where innovations can be developed and tried for broader application.64 As discussed, however,
exceptions to the view are increasingly recognized, with proponents arguing the benefits of engaging in
partnerships with private sector in not only filling an immediate gap but also providing perceived
advantages over pure government provision.65 The key arguments are addressed below.
Potential Benefits of PPPs
LaRocque, N. 2008. Public-Private Partnerships in Basic Education: An International Review. CfBT Education
Trust, Reading, p. 8.
60 Wang, Yidan. 1999. Public-Private Partnerships in Health and Education: Conceptual Issues and Options,
paper prepared for Manila Social Policy Forum: The New Social Agenda for East, Southeast and Central
Asia, Joint ADB-WB Conference, November 9-12.
61 Draxler, A. 2008. New Partnerships for EFA: Building on Experience, UNESCO-IIEP and World Economic
Forum, Paris and Geneva, p. 32.
62 Ibid., p. 23.
63 http://www.pfore.org/about.
64 Rose 2007.
65 Ibid.
59
20
PPPs may help to widen access to education. The public sector faces considerable resource constraints
in financing and providing education services to all on its own. PPPs can play a complementary role to
the State by providing additional finance to the education sector through, for example, adopt-a-school
type programs and other forms of philanthropy, thus filling the gaps left by the State. PPPs can also
facilitate increased access by making use of private schools to absorb the excess demand for schooling in
particular geographical areas. This can increase access for those attending private schools and reduce
class sizes for students in overburdened public schools. The Education Service Contracting scheme in
the Philippines does exactly that by targeting areas where public high schools are overcrowded.
PPPs may also help to lift the quality of education delivered, by incorporating the knowledge, skills and
innovations available in the private sector, whether pedagogic, technical or managerial functions.
Rigorous evidence on the impact of PPPs on the quality of education is relatively limited, partly due to
the inherent difficulties in defining what is meant by “quality” education and partly due to the lack of
studies that have been carried out using rigorous evaluation techniques.66 Nonetheless, there is some
evidence to suggest that PPPs can positively influence the quality of education through improved
teacher training, increased teacher attendance, and through the application of better management and
pedagogical techniques.67 An independent evaluation of the PEF's FAS program found that it led to a
marked improvement in school administration and management, lower teacher attrition, regular
attendance, better learning outcomes and increased teacher salaries and working conditions.68
PPPs, by increasing choice in education and linking educational subsidies to demand, may also lead to
increased accountability for educational results. This is because, under PPPs, parents are able to hold
educational providers directly accountable for the quality of service provision (ie. short route
accountability), rather than having to hold providers accountable through the political process (ie. long
route accountability), as described in Figure 7. 69
Proponents of PPPs argue that not only is short route of accountability good for increasing quality, it is
also advantageous in its own right, as strengthening local accountability can be a way of influencing the
demand for education as well as ensuring its relevance to those being served. Indeed, emphasis on local
level accountability is an approach embraced by many international NGOs and development agencies
alike, including UNICEF, in basic social services.70 Overall benefits of short route accountability are
particularly evident in areas underserved by governments who are too fragile or unable or unwilling to
respond to all existing demand.71
Quality of education is defined in different ways in the context of education, and efforts to measure quality
are equally varied, from teacher quality to learning outcomes to perceived quality of beneficiaries. See
Rose (2007) and Patrinos (2005).
67 See World Bank. 2009. The Role and Impact of Public-private Partnerships in Education, Washington DC, pp.
31-41.
68 Innovative Development Strategies. 2009. Third Party Evaluation of Punjab Education Foundation
Foundation Assisted Schools (PEF – FAS) Program, Islamabad, p. 61.
69 World Bank. 2004. World Development Report 2004: Making Services Work for the Poor, World Bank and Oxford
University Press, Washington. D.C.
70 Rose, P. 2007. NGO Provision of Basic Education: Alternative or complementary service delivery to support
access to the excluded? CREATE Research Monograph No.3. Brighton: University of Sussex.
71 Ibid.
66
21
FIGURE 7: SHORT AND LONG ROUTES OF ACCOUNTABILITY
Source: World Bank. (2004) World Development Report 2004: Making Services Work for the Poor, World Bank and
Oxford University Press: Washington. D.C.
Another commonly perceived benefit of PPPs is the increased efficiency in the delivery of education
services. Through PPPs, the State can apply competitive pressures of markets in the education sector to
spur innovations that generate increased efficiency. Partnerships also allow governments to transfer
responsibilities of certain functions to the public sector, while the government focuses on areas where
they have comparative advantages over the private sector, such as in policy, planning and quality
assurance. If designed to allow optimum levels of operational and management flexibilities of private
providers, PPPs can also overcome unnecessarily restrictive government rules and procedures that limit
the State's ability to deliver services efficiently, including antiquated pay practices and employment
arrangements.
Potential Risks of PPPs
The arguments in favor of PPPs are by no means accepted by all and PPPs have been subject to a
number of criticisms. A key concern with PPPs is that the contracting that underlies PPPs may be
complex and requires considerable government capacity to be able to design, implement and monitor
PPPs in order for benefits to materialize. This is particularly of concern in countries where the State has
relatively limited experience in working with the private sector and with contracting, which may leave
the State exposed to risks – both financial and in relation to quality.
A second criticism is that the private sector is not sufficiently developed or sufficiently large to allow for
PPPs in the education – particularly in poorer areas. Clearly, sufficient capacity in the private sector is
required if the government is to contract for the delivery of education services. Inadequate regulatory
and policy frameworks and administrative systems in developing countries may also hinder effective
implementation of PPPs and the delivery of quality education.
Critics argue that limited government capacity and a weak policy framework also mean that PPPs can
result in a loss of accountability to the public in its role as the duty-bearer of education. Ministries of
22
Education are traditionally amongst the most conservative, in terms of control over curriculum,
language policies and politicization of content – and therefore may be reluctant to relinquish control to
NSP partners.
What Role for PPPs in the Education Sector
At this stage, debates over the appropriateness of PPPs in the education sector are largely theoretical in
nature. As the World Bank (2009) notes, PPPs may affect school outcomes in either of two ways: by
changing the way schools function internally, and by changing the behavior of students and families.
Private provision of educational services may affect educational outcomes in a number of ways: (i)
private schools have more management flexibility than their public sector counterparts, (ii) providers
are usually chosen on the basis of quality and cost criteria, (iii) PPP contracts can result in optimal risksharing between the public and private sectors, and (iv) PPPs promote competition in the market for
education.72
Despite a growing number of PPPs in education around the world, rigorous evidence on the impact of
these programs is limited except for vouchers, where there is an extensive literature. In respect of
interventions such as private management, subsidies and private finance initiatives, empirical
information is less abundant. Evidence on the Colombian voucher program is that it had positive effects
on several outcomes over both the short and long term, including school attendance, years of schooling,
lower repetition rates, higher repetition rates and higher standardized test scores. On the other hand,
evidence on the national Chilean voucher scheme is mixed and controversial. Voucher programs in
Denmark, Sweden and the Netherlands appear to have increased competition and, in the case of the
latter two, have had a positive effect on student achievement.73 More and better evidence is required
to assess the potential for PPPs in the education sector.
The above arguments provide a useful starting point for considering the potential benefits and risks
related to education PPPs in any given context. Rigorous empirical evidence of the impact of PPPs in a
developing country context remains inconclusive, but available studies do show promising trends of
PPPs, and more importantly, some of the essential elements to implementing successful PPPs,
particularly for the benefit of the poor. While there are legitimate concerns about the use of PPPs, some
are unlikely to be relevant in practice. Clearly, PPPs – like any other education reform – should not be
oversold nor seen as a panacea for improving education performance in developing countries. A variety
of factors, both internal and external to the education system will influence the extent to which PPPs (or
any other school reform) can deliver successful outcomes for children. Despite this, it seems that PPPs
do have some advantages as policy tools and can play a role in broadening access and lifting the quality
of education in developing countries.
As discussed below, a range of PPP models can be explored, and the degree of benefits and risks
associated with PPPs with respect to equity cannot be generalized for all populations and across
different levels of education. The wide range of PPPs in place across a number of developed and
developing countries suggests they offer a flexible model that can be adapted to differing local
circumstances. To be sure, moving towards the establishment of effective partnerships is a gradual
Patrinos, H. et al . 2009. The Role and Impact of Public-private Partnerships in Education, World Bank,
Washington DC, pp. 33-34.
73 Ibid., pp. 35-41.
72
23
process that can only be achieved in incremental and deliberate steps, beginning with no less than the
State’s recognition of the private sector as a potential partner in the goal to achieve education for all. A
key to progress in the implementation of PPPs in the education sector is to overcome concerns amongst
both policymakers and the wider public about the potential for private sector involvement in education
and the potential for PPPs to assist DMCs in meeting their economic, social and educational objectives.
MODELS OF PUBLIC-PRIVATE PARTNERSHIPS WITH A FOCUS ON THOSE
TARGETING THE POOR
Despite the fact that many EAP countries have quite large private education sectors – one of the prerequisites to development of PPPs – there are comparatively few PPPs in operation in EAP countries. As
has been documented in a number of publications, there is a wide range of education PPP models in
operation around the world, including a small number in EAP countries such as Hong Kong, Indonesia
and the Philippines. This section outlines some of the PPP models that exist in the education sector in
EAP and elsewhere. The section begins with a classification of education PPPs according to different
types. For the purposes of this report, PPPs are categorized into five categories: (i) education service
delivery initiatives, (ii) infrastructure initiatives, (iii) voucher and voucher-like initiatives, (iv) professional
and support services and (v) philanthropic initiatives (Table 5).74
Educational service delivery initiatives generally involve programs under which a government agency
such as the Ministry of Education purchases places for students in private schools. These arrangements
are often used in cases where there is insufficient space in, or a complete lack of, spaces for students in
local public schools – particularly in poor areas. Thus governments may see the use of contracting with
the private sector as a cheaper option than either expanding an existing school or building a new one.
These PPP programs generally share a number of design features. Key features of these include:

A formal contractual arrangement between the government and the school. Contracts may be
either short and simple or lengthy and complex.

Payments are demand-driven with the school paid for each student they enroll. The per-student
payment may be a fixed amount per student or the amount may differ depending on the student's
grade level or other factors such as gender (ie. schools may be paid more for each girl they enroll).
Schools cannot charge fees above the level of subsidy provided, so the education is free to the
student.

Schools must meet certain criteria in order to enter the program – for example, they must be
registered or meet other minimum standards relating to teachers and infrastructure.

Schools are generally held accountable for student performance. Those that do not meet the
required standard of instruction (as determined by test scores or some measure of quality) may be
removed from the program.
74
This classification is similar to that outlined in LaRocque, N. 2008. Public-private Partnerships in Basic
Education: An International Review, CfBT Education Services, and LaRocque. N. 2005. Contracting for the
delivery of education services: a typology and international examples. Program on Education Policy and
Governance. Working Paper 05-07. Cambridge, MA: Harvard University Press.
24

The program is open to for-profit or not-for-profit schools.
Table 5: Classification of PPPs in Education
PPP Type
Examples
Contracting with private schools for delivery of education services
Education Service Delivery
Contracting with private providers for delivery of specialist curricula
Initiatives
Provision of tutoring services
Private management of public schools
Publicly and privately financed voucher programs
Voucher and Voucher-like
Targeted scholarship programs
Initiatives
Payment of subsidies to students at private schools
Education tax credits/tax assistance
Teacher training
Curriculum design
Professional and Support
School review/evaluation services
Services
Ancillary services such as food and transportation services
Educational testing and school rating services
Private Finance Initiatives - finance, construction and maintenance of
core and non-core educational assets
Infrastructure Initiatives
 Private leasing of public school facilities
 Equipping and maintenance of IT laboratories
Philanthropic Initiatives
 Scholarships, private voucher programs
 School sponsorships
 Adopt-a- School programs
 School construction
Source: Adapted from LaRocque (2008) and World Bank (2009).














There are a number of examples of such programs in EAP and elsewhere. The Philippines Education
Service Contracting (ESC) Scheme, which was introduced in the 1980s, is one of the largest educational
service delivery programs in the world and is one of the largest in the world (Box 2). There are a number
of other examples of educational service delivery initiatives, including the Universal Secondary
Education program in Uganda, which pays a subsidy for each student enrolled in eligible private
secondary schools (ie. those in sub-counties that are not served by government-aided or public schools).
Assistance under the program is targeted at low-fee schools and is well below the average per-student
subsidy paid to public schools. In 2008, there were some 430 private secondary schools – serving
approximately 56,000 students – participating in the USE program, up from 363 schools and 42,000
students in 2007.
A second example is the Foundation Assisted Schools (FAS) Program operated by the PEF in Pakistan.
That program pays participating schools Rs350 per month per student for each student enrolled. Schools
are located ion poor urban and rural areas in Punjab province of Pakistan. School cannot charge tuition
fees. Continued participation in the program requires that students at participating schools meet
performance standards. The program was introduced in late 2005 and has expanded rapidly – from 54
schools and 20,000 students in late 2005 to 1,157 schools and 500,000 students in early 2008. The Sindh
25
Education Foundation (SEF) is introducing the Promoting Private Schooling in Rural Sindh (PPRS)
program, which will use a PPP model to increase access to basic education in rural areas of Sindh
Province in Pakistan. The PPRS will operate like the PEF FAS model and is being supported by a World
Bank loan. In 2010, the SEF expects to establish 100 schools under the program. The Baluchistan
Education Foundation (BEF) has also introduced a PPP program under which it selected private school
operators to set up 300 low-fee schools over the project period in rural and semi-urban areas of the
province.
In February 2007, the Government of Uganda introduced a policy of Universal Secondary Education
(USE). Under the policy, the government pays a subsidy for each student enrolled in eligible private
secondary schools. Participation in the USE program is limited to private secondary schools in subcounties that are not served by government-aided or public schools. Only schools charging no more
than Ush75,000 per student per term can participate in the program. Participating schools are chosen
by the Ministry of Education and Sports and receive a subsidy of Ush47,000 per student per term – well
below what participating government-aided schools receive. A Memorandum of Understanding is
signed with individual private schools to ensure compliance with the policy’s implementation guidelines.
In 2008, there were some 430 private secondary schools – serving approximately 56,000 students –
participating in the USE program.
The Venezuelan Association of Catholic Education (AVEC) runs over 700 Catholic schools, most of which
deliver education to poor children. In 1990, the Ministry of Education, Culture, and Sport (MECD) struck
an agreement with AVEC to provide subsidies to private schools located in low-income urban and rural
areas, indigenous communities, vocational schools, and those schools that were only able to cover up to
85 percent of operational costs. Fe y Alegria schools form a large body of AVEC schools. In 2005,
government subsidies to AVEC schools amounted to almost $49 million, covering 483,000 students.
The agreement between MECD and AVEC holds AVEC schools to higher degree of accountability for
performance than public schools.75 Whereas there are no conditions imposed on public schools, AVEC
Box 2:
Education Service Contracting, Philippines
Under the ESC program, the government contracts with private schools to enroll students in areas where there
is a shortage of places in public high schools. The per-student payment to private schools can be up to
PhP4,000 and cannot exceed the unit cost of delivery in public high schools.
ESWC is one of a number of programs that comes under the Government Assistance to Students and Teachers
in Private Education (GASTPE) program. Subsidies under ESC are generally restricted to students at schools
that charge low fees, and preference is generally given to students from low-income families. The GASTPE
scheme is administered by the Fund for Assistance to Private Education, a private not-for-profit organization.
The Department of Education has introduced a certification program for schools participating in ESC, which
aims to address concerns about the quality of education at some schools.
In 2005/06, over 380,000 students in 1,833 participating private schools were subsidized under the ESC
program. Grantee numbers and participating schools are up from just 4,300 and 158 respectively in 1986/87.
The number of grantees and participating schools are up considerably since 2003/04.
75
Mora, J.G. (2005) Public-Private Partnerships in Latin America: A Review Based on Four Case Studies, Paper presented at the Conference
Source:
LaRocquethe(2008)
on Mobilizing
Private Sector for Public Education, October 5-6, Harvard University, Cambridge, MA.
26
schools must provide financial statements to MECD regarding the use of funds and present an annual
management report. Supervision is also a large part of the AVEC model: supervisors visit the schools
twice a year to assess the academic and operational situation. This information is then compiled for
future analysis.
Private management of public schools involves the government contracting directly with private
providers to manage/operate public schools. Although these schools are privately managed, they
remain publicly owned and the government remains ultimately responsible for their performance.
Contract schools can be run by a variety of for-profit, not-for-profit and community organizations.
Schools are paid a fixed amount per student or are paid a management fee. Privately managed schools
are subject to performance benchmarks. Unlike the previous category of PPPs, the infrastructure used
to teach students is publicly, rather than privately, owned. Privately managed schools are generally used
in poor and disadvantaged areas. Teachers may be subject to centralized government contracts or may
work under more flexible contracts under local control.
One example of a privately managed public school program is the Concession Schools model in Bogota,
Colombia. Under the Concession Schools program, newly constructed public schools are managed by
private operators. To be eligible, private operators must be organizations with a good track record.
Private providers are chosen by a competitive selection process. Contracts are 15 years in length and
schools have considerable management autonomy, including being exempted from inflexible pay and
employment legislation. Schools are paid $500 per student per year – about what public schools are
paid, although they operate for a full day, rather than a half day as do their public counterparts. Schools
are located in disadvantaged areas. Concession schools are subject to formal contracts that specify
delivery standards, including educational outcome targets. There are some 25 schools serving over
26,000 students and plans for further schools.
Under the Lahore program, a local NGO – Cooperation for Advancement, Rehabilitation and Education
(CARE) – manages more than 170 public schools on behalf of the City District Government of Lahore
(CDGL). However, unlike most private management models, CARE does not receive any compensation
from the CDGL. Instead, it raises philanthropic funds to increase schools' budgets to pay for extra
teachers, books, pedagogical aids, etc. CARE schools operate with a mix of publicly funded regular
teaching staff, publicly funded contract teachers and teachers hired by CARE using its philanthropic
funds. Some CARE schools also participate in the FAS program operated by the PEF (see above).
Developments in Learning (DIL) is another NGO in Pakistan that operates a mixed school
adoption/private management model. Under that model, DIL provides additional funding for its
'adopted' public schools and contracts with private providers to manage those schools.
Other examples of this model exist, including one operating in Lahore (Pakistan), Transformed Schools in
PRC, Fe y Alegria in South America (Box 3) and the 'contract schools' model in the United States of
America.76
76
LaRocque, N. and V. Jacobsen. 2000. Minban: A Market and Regulatory Survey of Private Education in China
(A Tale of Two Kitties), Arthur Andersen, Wellington and LaRocque, N. 2008. Public-private Partnerships in
Basic Education: An International Review, CfBT Education Trust, Reading.
27
Box 3:
Fe y Alegria, South America
Fe y Alegria (FyA) is a Jesuit controlled NGO that operates formal pre-school, primary, secondary and technical
education programs in the poorest communities in Latin America and Spain. The program began in 1955 and
has since spread to 14 other countries. FyA’s primary mission is to provide quality education to poor people, to
ensure that students complete at least the basic cycle of schooling, and to establish schools that operate on
behalf of community development. Under the FyA model:
 ministries of education pay the salaries of teachers and the principal;
 foundations, international agencies and voluntary fees from the local community pay for the land,
construction and maintenance of schools;
 the community invites FyA to open a school and builds it; and
 FyA trains and supervises teachers, manages the school and assists it in its operation as a community
development centre.
A national office coordinates the network of FyA schools in each country, while overall coordination is provided
by headquarters in Venezuela. Most FyA schools are located in rural areas, but some are found in or near urban
slums. FyA schools can be either public or private, although a majority are public. Schools generally enjoy
considerable autonomy – they can appoint school directors and teachers without state or teacher union
interference. The central curriculum is supplemented with locally developed materials. FyA schools do not
charge compulsory fees. The main indicator of school performance is student retention. In 2005, there were
more than 1.2 million students in the FyA network – up from just 220,000 in 1980. Over 500,000 of these FyA
program participants were in formal education programs.
Source: World Bank (2009)
Voucher and Voucher-like Programs. School vouchers are a certificate or entitlement that parents can
use to pay for the education of their children at a public or private school of their choice, rather than the
public school that is closest to them or to which they have been assigned. Vouchers are paid directly
from a public entity to parents or to schools directly on parents’ behalf. Voucher programs are in many
ways similar to the educational contracting models described above – fixed payment per student –
although they differ in that, with vouchers, the government does not 'bulk buy' places at a particular
school as they do under school contracting schemes. In both cases, however, the decision to attend a
particular school is made by the parents, rather than the government. It could be argued that the
voucher model reduces the single buyer risk (ie. the significant revenue loss if the contracting agency
decides not to renew a school's contract). However, schools that participate in voucher schemes are
likely to face similar risks in that they generally need to meet certain pre-conditions in order to remain in
the voucher program.
Voucher programs may have quite different design features and associated rules and regulations
relating to eligibility, fee charges, school registration and student admissions. For example, some
programs may allow schools to charge fees on top of the value of the voucher, while others may not. In
essence, governments use vouchers to “contract out” enrolment of students or buy outputs, which
allows expansion of access more quickly through existing schools rather than building and equipping
new schools. Another important reason for use of vouchers is that they can promote competition and
choice, which in turn can lead to improvements in innovation and efficiency in both public and private
schools. Vouchers can also be much better targeted to the poor and disadvantaged students and gives
28
them a wider range of educational choices, since they can attend public or private schools.
Governments can use vouchers to target low-income students, and hence, publicly funded vouchers
could provide higher quality of education at a lower cost than would be possible through only public
provision. In addition, many nonprofit, private schools subsidize publicly funded students, in which case
vouchers allows them to benefit from the higher fees paid by privately funded students. 77
Voucher schemes are much more common than either school contracting or school management
programs and exist in a number of developed and developing countries, including Pakistan, Chile, the
Netherlands, Colombia (Box 4), Hong Kong, New Zealand and the Unites States of America. These
include programs with national coverage those with sub-national coverage. There are also a number of
examples of voucher-like programs. Although such programs are not vouchers in name, they are similar
to vouchers in that they provide subsidies (full or partial) to private schools or to students attending
private schools. In some cases, assistance may involve a per-capita subsidy, while in other cases,
assistance may be in-kind (eg. teachers). The difference between vouchers and some voucher-like
programs is marginal at best – often the only difference is whether the voucher is full or partial. While
voucher-like programs may involve payments direct to schools (as opposed to certificates to be
redeemed by families), many are, for all intents and purposes, vouchers in that they involve demandbased financing triggered by student enrolments.
Box 4:
Plan de Ampliación de Cobertura de la Educación Secundaria (PACES), Colombia
In the 1990s, Colombia experimented with a targeted voucher program whose objective was to increase access
to secondary schooling for children from poor families. PACES provided 125,000 vouchers during its six years in
operation from 1992 to 1997. The program offered vouchers to students entering sixth grade, the start of
Colombian secondary school. Key elements of the program included:
 vouchers were available to children from low-income families who had attended a public primary school
and who had been accepted at a private school;
 vouchers renewal was linked to satisfactory academic performance;
 the value of the voucher was $US190 – about half the cost of attending a private secondary school;
 the voucher was deposited by the student and the school received funds directly from the bank, rather
than an intermediary;
 schools were allowed to charge top-up fees; and there was minimal regulation of private schools
As noted by Patrinos (2005), the program led to considerable enrolment increases, especially for the
disadvantaged, at a low cost to government. The quality of education provided under the program was at least
comparable to that provided in public schools, yet the per beneficiary cost of the program was about 77
percent of the unit cost of public secondary education.
Source: LaRocque (2008)
There are many examples of voucher programs. The Netherlands and Chile operate national voucher
programs. The voucher program in the Netherlands applies to both public and independent schools.
Not-for-profit organizations and parents can set up schools if they meet certain minimum requirements.
77
World Bank. 2006 “Columbia Contracting Education Services.” Report 31841-CO. Washington, D.C.
29
Funding follows the student and schools receive the equivalent of the per capita cost of public schooling
for each student enrolled. The number of teachers to which each school is entitled is determined by
student numbers. Schools are free to supplement their government funding, but this is severely limited.
The Ministry of Culture, Education and Science places a number of requirements on schools in relation
to the quality of education delivered. Schools serving disadvantaged students receive higher per-student
subsidies.78 The Chilean voucher program was introduced in 1980 and covers public and private (secular
and religious) schools. Schools receive monthly payments based on the number of students enrolled.
Initially, subsidized schools could not charge fees, but this has been changed. Nonetheless, vouchers do
cover most or all of the tuition cost at eligible schools. Voucher schools must follow certain operating
guidelines relating to basic facilities, employment of certified teachers, class sizes and so forth.
There are several other examples of voucher programs, including the Swedish school choice program,
the voucher program operated by the PEF in Pakistan and several city and state-level programs such as
Box 5:
Primary School “Lunch” Program, Mongolia
In Mongolia, approximately one-third of primary school children are reportedly under-nourished, especially
during spring time following the long winter months. A daily intake of 200 ml of milk is widely recognized to
provide children with sufficient amount of protein, energy, key micro-nutrients and vitamins, improving their
overall nutritional status.
In 2006, the Government of Mongolia launched a school lunch scheme for primary school children, under a
public-private partnership arrangement. As a result of intense lobbying by the Mongolian Food Industry
Association, only domestic produce is used, with eighty percent of meals provided by local dairy enterprises.
Also known as the “milk scheme,” the program aimed to provide children with nutritious snacks to improve
their health and learning capacity as well as overall school attendance, particularly among poor families. Policy
was developed to allow local governments and school administrators to select private providers through
bidding of contracts. In the 2007-2008 school year, an estimated 9.7 billion MNT was spent for about 187,600
children in grades 1-4.
A few years since the launch of the program, reports of its impact have been mixed. Some noted modest
reductions in truancy and improvements in study habits. However, many raised concerns of poor quality
products as well as high levels of corruption and nepotism among school officials engaged contracting
processes. In 2007, an audit of the program conducted by the National Audit Office (NAO) found evidence of
widespread misuse of funds and limited transparency in schools with respect to program budgeting, planning
and selection of suppliers. The experience reveals the critical importance of effective monitoring and oversight
to ensure adherence to appropriate standards and practices to realize the full benefits of public-private
partnerships.
Source: “Lunch Program Implementation is Insufficient.” By B. Bolortuya. July 2008. Mongolian National News
Agency. http://www.montsame.mn/; Joint UN Food Security Assessment Mission to Mongolia.
FAO/UNICEF/UNDP, April 2007; and Mongolia: Project Completion Report. Government of Mongolia-Japan-FAO
Dairy Food Security Project. FAO. 2007
the Milwaukee Parental Choice Program. New Zealand operated a voucher scheme – the Targeted
Individual Entitlement – in the 1990s that provided private school vouchers to students from lower
income families. Several countries, including Bangladesh, New Zealand, Canada, Senegal and Australia
operate voucher-like subsidy programs that are, to various degrees, similar to voucher programs.
78
Patrinos, H. 2010. Private Education Provision and Public Finance, Policy Working Paper 5185, World Bank,
Washington DC, pp. 5-8.
30
Several countries also operate voucher-like programs at the pre-school level, including the Philippines (a
small program similar to the ESC discussed above), Hong Kong, New Zealand and Australia.
Professional and Support Services. Governments also make considerable use of PPPs for the delivery of
education professional and support services such as school evaluation/school review, teacher training
and textbook publication. Examples include CfBT Education Trust, which undertakes school evaluations
for public schools in Dubai on a regular basis. Non-instructional services, such as transportation and
school meals can also be contracted out through PPPs. One example is the Mongolia Primary School
Lunch Program (Box 5). Generally, PPPs for professional and support services allow governments to
utilize private expertise and efficiency on particular services as well as economies of scale to increase
cost-effectiveness and release schools and education officials to focus on teaching. The relative ease
with which the quality of inputs can be specified and monitored through contracts makes this type of
PPP one of the least risky partnerships, and some form of professional and support service contracts
exist virtually in every public education system around the world.79 Innovative use of targeted support
and pro-poor criteria also enables governments to use these types of PPP to address disparities and
reduce inequality in enrolments and completion, especially amongst the poor.
Educational Infrastructure Partnerships. PPPs are an increasingly common form of procurement for
large infrastructure projects in the education sector. Infrastructure PPPs can be structured in a variety of
ways (Table 6). Under the most common type of PPP arrangement – Build-Operate-Transfer (BOT) – a
private operator is granted a franchise (concession) to finance, build and operate an educational facility
such as a public school, university building or hostel. The government, in effect, leases the facility from
the private sector for a specified period, after which the facility is transferred to the government.
performance standard.
Table 6: The range of options for PPP in infrastructure
Type of Partnerships
Features
Traditional design
and build
The government contracts with a private partner to design and build a facility to specific
requirements.
Operations and
maintenance
The government contracts with a private partner to operate a publicly owned facility.
Turnkey operation
The government provides financing, the private partner designs, constructs, and operates facility
for a specified time period, while the public partner retains ownership of facility.
Lease-purchase
The private partner leases a facility to the government for a specified time period, after which
ownership is vested with government.
Lease or own-developoperate
The private partner leases or buys a facility from the government and develops and operates the
facility under contract to the government for a specified time period.
Build-operate-transfer
The private partner obtains an exclusive contract to finance, build, operate, maintain, manage, and
collect user fees for a facility for a fixed period to amortize its investment, and at the end of the
franchise, the title reverts to the government.
Build-own-operate
The government either transfers ownership and responsibility for an existing facility or contracts
with a private partner to build, own, and operate new facility in perpetuity.
Source: World Bank 2006.
79
Ibid.
31
While arrangements can differ widely, infrastructural PPPs have a number of characteristics in common.
Private sector partners invest in school infrastructure and provide related non-core services (e.g.
building maintenance); the government retains responsibility for the delivery of core services such as
teaching; arrangements between the government and its private sector partner are governed by longterm contracts – usually 25–30 years. Contracts specify the services the private sector has to deliver and
the standards that must be met; service contracts are often bundled, with the private sector taking on
several functions such as design, building, maintenance and employment of non-core staff; and
payments under the contract are contingent upon the private operator delivering services to an agreed
Infrastructure PPPs differ from traditional procurement methods in several ways. First, the private
sector provides the capital required to finance the project. Second, the government specifies the
contract in terms of ‘outputs’ or service level requirements, rather than in terms of ‘inputs’. Third, the
newly constructed facility is not turned over to the government upon completion. As noted above, it is
operated by the private sector until the end of the contract period.
Education Philanthropy. One of the most common forms of partnership at the Basic Education level
between the public and private sectors is educational philanthropy. There are any number of examples
of individuals and private sector firms donating goods, services or cash to schools in either an ad-hoc
fashion or as part of an organized Corporate Social Responsibility initiative. Educational philanthropy can
also involve broader programs to improve education through the development of new forms of
educational provision, policy advocacy, financing of scholarships/vouchers and other initiatives. For
example, India’s Bharti Foundation committed $50 million to the creation of strictly non-profit, private
schools in the nation’s poor rural areas. Corporate foundations in the Philippines are well organized and
donate considerable amounts to schools, both through the country’s Adopt-a-School program (se
below) and through various other initiatives. This work is coordinated by an umbrella group – the
League of Corporate Foundations – which has developed a roadmap of corporate giving to the
education sector. Corporate foundations in the Philippines donated $P543 million in 2007 – up from just
P189 million in 2002 (Table 7). This assistance included infrastructure/facilities, teacher training, TVET,
ICT integration, tertiary education, curriculum support and health/social services.
One form of education philanthropy that is common in the Basic Education sector is adopt-a-school
(AAS) programs. While these programs may have different objectives, broadly they seek to encourage
the private sector (individuals, corporations and NGOs) to partner with the government to address
problems in public schools such as shortages of classrooms, desks and textbooks, to improve quality or
to broaden educational access.
The Sindh Education Foundation (SEF) operates an AAS program in the Pakistan province of Sindh.
Under the program, which was launched in 1997, government schools are adopted by private
individuals, companies or organizations. The program aims to improve government schools in the
area of quality, access, infrastructure and community participation. The SEF acts as facilitator
between the school and the adopting body and provides ongoing technical support and monitoring of
processes and outcomes. Other AAS programs exist in Pakistan, including one operated by the Pakistan
Center for Philanthropy.
32
Table 7: Total Amount of Philanthropic Investments in Education, 2002 -2007
600
543
500
400
Millions of Pesos
367
296
300
200
194
189
165
100
0
2002
2003
2004
2005
2006
2007
Source: Investing in Education, League of Corporate Foundations
The AAS program in the Philippines was established in 1997, although it did not come into effect until
2003 when the implementing Rules and Regulations and the regulations authorizing the tax incentives
associated with the program were approved. Under the program, private entities are allowed to assist a
public school or tertiary institution, preferably located in the twenty poorest provinces of the
Philippines. This assistance can involve any number of activities, including staff and faculty development
for training and further education, construction and upgrading of facilities, provision of books and other
instructional materials and modernization of instructional technologies. Donors are eligible for tax
breaks for donations. By 2006, some 22,000 schools had benefited from more than $50 million provided
by 300 donors under the AAS program.
PPPs and Pro-poor Policies
From the above brief survey, it can be seen that there is a wide range of PPP models in use in both
developed and developing countries, the bulk of which target the poor or disadvantaged. These models
include educational service delivery programs, voucher and voucher-like programs, private management
programs, infrastructure PPPs, professional support services and adopt-a-school models. On the other
hand, philanthropic initiatives such as AAS programs generally involve private financing (rather than
delivery) of education. Infrastructure initiatives are a hybrid – involving elements of both financing of
school buildings and delivery of ancillary services such as building maintenance. In all cases, there is
ample scope to design these models to address inequities in access and quality and to lever the private
sector to help overcome inequities in existing school systems, rather than reinforcing them.
33
The categories of PPP differ in other ways as well. In the case of voucher and educational service
delivery PPPs both involve 'core' educational services – ie. teaching related activities. In contrast,
infrastructure initiatives involve the financing and delivery of services that are not part of the 'core'
mission of schools, namely building management. In that sense the latter's impact on educational
outcomes is likely to be less direct than the impact of educational contracting or vouchers. Professional
and support services are a hybrid, with some services involving 'core' educational services such as
teacher training and curriculum design, while others such as ancillary services involve 'non-core' services
such as food and transport services.
Many EAP countries face significant educational challenges related to access and quality of delivery. A
number also have large and growing private education sectors – an important pre-requisite for
introducing PPPs. Despite this, there is comparatively little use of PPPs in EAP countries. Indeed, regions
such as South Asia and Latin America seem to be the regions making the most use of the private
education sector in education.
The private education sector has not traditionally been seen as a vehicle for helping the poor or
disadvantaged communities. Rather it has commonly seen as a preserve of the rich. This section has
shown that is false. Indeed, private schools serve large and growing numbers of poor children. Welldesigned PPPs offer developing country governments another potential policy tool for harnessing the
skills and talent in the private sector to help improve access and quality for children who are poorly
served or not served at all by the public school system. This section has highlighted a number of
examples of PPPs that either have operated or are currently operating that focus on serving the needs of
the poor – including the Concession Schools and PACES voucher in Colombia, the Education Service
Contracting Scheme in the Philippines, the PEF FAS and the Education Voucher Scheme (EVS) programs
in the Punjab province of Pakistan and the Adopt-a-school programs in the Philippines and Pakistan.
PPPs provide governments with an additional mechanism for increasing educational access among
disadvantaged groups, including the poor and those in remote regions who are underserved or not
served at all by the existing school system. PPPs can be targeted toward particular groups of
beneficiaries – whether based on geography, gender or other factors. In addition, it is often easier to
implement a targeted policy instrument using private schools because the private sector operates within
a more flexible regulatory environment that allows increased scope for innovation. In addition, as Lewin
and Sayed (2005) note, contracts with private providers increase the government's ability to influence
non-government provision in a pro-poor way through conditions attached to subsidy.80
80
Lewin, K. and Y. Sayed. 2005. “Non-Government Secondary Schooling in Sub-Saharan Africa: Exploring the
Evidence in South Africa and Malawi.” London: Department for International Development, p. xii.
34
IV.
MAKING PUBLIC-PRIVATE PARTNERSHIPS WORK:
REGULATION AND IMPLEMENTATION
PPPs can bring great potential to improve the education sector and address disparities. Sound policy
and regulatory frameworks that encourage private involvement in education, well-designed contracts
and robust institutional capacities will all encourage the effective implementation of PPPs.
Governments, duty-bound to ensure the fulfillment of rights to education of all children, bear the
responsibility to ensure all three factors are integral part of all education partnerships. Failure to do so
can not only result in the loss of opportunity to improve both access and the quality of education, but
also create government exposure to financial and policy risks.
FOSTERING A VIBRANT PRIVATE EDUCATION SECTOR
PPPs involve agreements between the public and private sectors on agreed targets, outputs and goals,
sometimes through formal contracts with a specified timeframe. Partnerships require partners. In
order to operate effectively, PPPs require a vibrant and dynamic private education sector. Governments
can promote the use of PPPs for the poor by taking steps to facilitate the involvement of the private
sector in education. One of the most important ways it can do that is to create an enabling policy and
regulatory environment that encourages private involvement in education, allows private providers to
operate effectively and efficiently, and promotes the delivery of quality education. Whether engaged in
direct service delivery or in broader policy advocacy for education, the private sector – broadly defined
to include for-profit institutions, NGOs and faith-based organizations – requires a sound policy and
regulatory framework if it is to assist governments to meet their educational and wider objectives.
However, throughout the region, several common weaknesses are found in the overall policy and
regulatory environment for private actors in education.81 Underlying those weaknesses are the
prevailing historical, social and political realities of many countries, where popular views of the roles of
public and private sectors heavily favor the former in defining the public interest, and thus, delivery of
basic goods and services and policy formation.82 Private funding and delivery of education services may
be perceived with particular suspicion, with actions of private providers regarded as possible threats to
State authority (rather than complementary or as agents of government programs), and in the case of
for-profit institutions, the profit motive may be seen as incongruent with the perception of education as
a social rather than commercial good. Therefore, while private actors with relatively limited scope of
mainly charitable mandates are generally accepted, those engaging in policy advocacy and social service
delivery are often marginalized from legitimate means to participate in their endeavors. This is most
For a more detailed discussion, see Fielden, J. and N. LaRocque. 2009. The Evolving Regulatory Context for
Private Education in Emerging Economies, World Bank, Washington DC; LaRocque, N. 2008. Public-private
Partnerships in Basic Education: An International Review, CfBT Education Services, pp. 38-47; and Patrinos,
H. et al. 2009. The Role and Impact of Public-private Partnerships in Education, World Bank, Washington DC,
pp. 43-58.
82 For more on the historical accounts of the role of central governments and the private sector, see
Yamamoto, T. (ed). 1995. “Emerging civil society in the Asia Pacific Region”, Singapore: Institute of Southeast
Asia Studies.
81
35
evident at the primary education level, where, unlike pre-primary and secondary education, political
commitments to free and compulsory education seem to create greater political sensitivities to engaging
with the private sector due to either political factors or the association of “private” education with user
fees and increased inequity. These weaknesses are discussed briefly in turn.
First, governments are often reluctant to recognize explicitly the role played by the private sector in
legislation or in education plans and strategies developed across the region. In some cases, government
may ban outright the existence of private schools or may limit the number that can be established. This
is not always the case as some countries, including PRC and the Philippines provide explicit
Constitutional or legislative recognition of the private sector's role in education. In addition, some
countries with dominant religious affiliations (e.g., Indonesia, the Philippines and island states in the
Pacific) explicitly mention the contribution of the church to education development. In the case of
Philippines, the role of NGOs is also institutionalized in its Constitution of 1987 as well as in relevant
development strategies.
Second, government school registration criteria and processes often limit the scope for new private
providers to establish themselves. These regulations include minimum requirements for a school's land
area or minimum requirements for building space, onerous approval processes or high registration fees.
The objective of many of these regulations is laudable – to protect consumers from sub-standard
education services. However, this objective must be balanced against the adverse impact that overly
restrictive establishment criteria can have on schools' ability to set up, especially in under-served or
poorly served areas. The administration of regulations pertaining to private providers can often be
inconsistent, subjective and non-transparent, all of which provide opportunities for corruption.
Overlapping jurisdictions – across Ministries and between different levels of government – can result in
rules and regulations that are contradictory and difficult to implement.83 Limits on the entry of new
schools – due to inappropriate criteria or to cumbersome/non-transparent processes – can raise the
costs of provision to such a degree that potential providers are deterred from setting up or newly
created schools must charge such high fees that children from poor families cannot afford to attend.
They may also push schools to operate as unregistered or clandestine providers, meaning that the poor
who attend these schools have no legal or regulatory protection. The costs of such regulation will fall
disproportionately on the poor, who have fewer education options than others.
Third, the ability of the private (non-government) sector to flourish is further limited by weaknesses in
the legal framework for not-for-profits. In some countries, there is simply no legal form for NGOs, while
in others, it is typically more difficult to register "associations" such as NGOs than to register commercial
institutions and charitable “foundations”.84
Finally, education policies in the region generally restrict funding to public schools only – irrespective of
whether particular schools serve the rich or poor. Limiting funding only to public schools does little to
encourage the spread of private schools or to promote quality in private education – particularly in
areas with education and limits the entry of private schools – especially those that might serve poorer
83
84
Ibid.
NGOs can be distinguished between “foundations,” a collection of assets, and “associations,” a collection of
people. See: Baron, Barnett. The Legal Framework for Civil Society in East and Southeast Asia. Opening
remarks for a workshop held at the Catholic University of America, Washington, April 12, 2002. Available
at http://www.icnl.org/journal/vol4iss4/ar_baron1.htm. [Accessed on 15th March, 2010].
36
populations. Over the longer term, this is likely to reduce both the quality and sustainability of the
private school sector in developing countries.
Governments can do a number of things to address the above problems. They can provide legal
recognition for private providers – both for-profit and not-for-profit – which offers a platform for
building political and public support for private sector involvement in education. Governments can also
ensure there is a legal framework in place for not-for-profits and encourage the creation of new private
schools by implementing establishment criteria that are: attuned to the local context, objective and
measurable, open to all prospective private school entrants and focused on outputs and outcomes,
rather than inputs. Improvements can also be made to streamline school registration processes,
including ensuring that such processes are time-bound and that all establishment requirements are
transparent, set out in advance and applicable to all potential school operators.
Governments can promote investment in private education by following the lead of countries as diverse
as the Philippines, Pakistan, Bangladesh, Senegal, Australia and Canada by opening up government
funding to private schools. Such funding can be provided either in cash (eg. subsidies, vouchers,
contracting) or in-kind (free or discounted land, building materials or water pumps). Funding should be
open to both for-profit and not-for profit providers and should be targeted at poor students and schools
serving low income populations. Finally, policymakers can also improve the functioning of the education
system by ensuring that families are well informed about the performance of schools, either through
public dissemination of school test scores or introducing independent school review systems to provide
information on schools’ performance.
Governments can also promote PPPs by offering tax breaks and incentives to businesses that adopt a
school or make contributions to school systems and provide funding to private and faith based
institutions to carry out teacher training or other technical support activities, with supporting policies
and clear financial viability.
DESIGNING AND IMPLEMENTING PUBLIC-PRIVATE PARTNERSHIPS
Section III outlined a number of examples of PPPs that could be introduced in the education sector. To
be successful, PPPs must be well designed and well implemented. The design of PPPs should be based
on an assessment of the appropriate role of government in education and the specific context in which
they are proposed. PPPs such as vouchers, contracting and private management of public schools all
involve government finance of education delivered in private schools or by the private sector. In this
way, they recognize the range of policy instruments available to government, the need to distinguish
between the financing and provision roles of government and the fact that there are strong arguments
to support a role of government in education that is limited to finance and regulation. 85 PPP design
should reflect a number of factors, including:

85
the objectives sought (ie. improve access, enhance quality, increase efficiency of delivery);
Poterba, J. 1996. ‘Government Intervention in the Markets for Education and Health Care: How and Why?’,
in Fuchs, V. (ed.) Individual and Social Responsibility: Child Care, Education, Medical Care and Long-term Care
in America, National Bureau of Economic Research, University of Chicago Press.
37

the nature of targeting and the target group to be assisted (ie. girls, ethnic groups, remote
geographic areas); and

'market' factors such as the extent of the existing private school network, the potential for new
education providers to establish themselves and the extent of the existing not-for-profit delivery
network.
For example, voucher programs are more likely to be successful in situations where there are large
numbers of private schools that could accept publicly financed students. On the other hand, contracting
arrangements may be more appropriate in rural areas that are under-served by the public sector
system. Vouchers or scholarships may be better suited than contracting arrangements to targeting
access for disadvantaged girls or ethnic groups, while contracting arrangements may be better suited to
targeting access for a particular geographic area. The equity impact should be a key consideration in the
design and selection of education PPPs if the objective is to address the causes of poverty. PPPs may
also reflect ‘social responsibility’ factors, such as the ethos of charity and corporate social responsibility
trends in the private sector, civil society and self help groups to augment government provision of
education to disadvantaged groups.
Good PPP design, while critical, is not sufficient to ensure the success of a PPP in education. To be
successful, education PPPs must also be well implemented.86 An important factor in the successful
design and implementation of education PPPs is the need to ensure that the government agency
responsible for these partnerships has the resources, information, and skills needed to design, develop,
and manage the contracting processes that underlie PPP programs. PPPs require a significant mindset
change among public sector officials – from seeing their role as managers of inputs to seeing themselves
as contract managers with a focus on outputs delivered and on program outcomes achieved. To be
effective and build support for PPP programs, it is essential that bidding processes be seen as fair,
transparent and competitive. Bidding for service delivery contracts such as school management
initiatives or private finance initiative contracts should be open to all private organizations, including
both for-profit and not-for-profit providers. A well run bidding process is likely to have positive effects in
both the short and long term, yielding bids that offer value for money, minimizing the potential for
corruption in contract awards and building market confidence in PPPs thereby encouraging growth in
the private education market. A crucial component of any PPP in the education is an effective
communication plan. Such a plan can help to overcome opposition to private involvement in
education and highlight the benefits of the programs introduced.
V.
UNICEF/ADB AND PUBLIC-PRIVATE PARTNERSHIPS IN
EDUCATION
In recent years, the ADB has made a strong commitment to the expansion of private involvement in
education and to the use of PPPs in the sector. For example, the ADB Education Policy (2002), states that
the ADB "will actively support private sector education institutions and education-related industries and
86
For a more detailed discussion, see LaRocque, N. 2008. Public-private Partnerships in Basic Education: An
International Review, CfBT Education Services, pp. 38-47; and Patrinos, H. et al. 2009. The Role and Impact
of Public-private Partnerships in Education, World Bank, Washington DC, pp. 43-58.
38
services … when this is clearly the more cost-effective alternative."87 More recently, the ADB's longterm strategic framework Strategy 2020 (2008), made a further commitment to "explore opportunities
for new approaches and instruments involving public-private partnerships" across all education levels.88
The ADB's Education and Skills: Strategies for Accelerated Development in Asia and the Pacific report
(2008) identified scope for innovative partnerships at both the Technical Vocational Education and
Training and higher education levels.89
A recent study examined all ADB education projects from 2000-2009 and found that just under 40
percent of those projects included some kind of a PPP component, including voucher or voucher-type
programs, capacity building initiatives, government purchase arrangements and private management of
public institutions. About one-quarter of the projects that included PPPs involved voucher/voucher-type
arrangements or private management. The bulk involved capacity building or similar initiatives.
Education PPPs were most common in South Asia and in Bangladesh in particular.90 There are few
examples in the region, however, of PPP projects in education the explicitly address the educational
needs of the poor and other disadvantaged communities.
The ADB is currently undertaking a number of other initiatives aimed at promoting the use of PPPs in
ADB projects, including development of a PPP strategy study to support implementation of education
PPPs in ADB, preparation of draft assessment instrument for PPPs in education, preparation of case
studies of lessons learned from the international experience with PPPs in education and development of
a toolkit for implementing PPPs in education.
In UNICEF, efforts to support PPPs have not been at an operational level through specific project
activities. Rather, emphasis have been made in policy-level support through advocacy, policy reform and
improved coordination. For example, in a number of countries where UNICEF coordinates the Education
sector Working Group (ESWG), efforts are being made to bring NGOs, faith-based organizations and
private sector associations into the ESWG as members. In Cambodia, UNICEF provides funds for the
administrative expenses of KAPE, a consortium of NGOs and civil society partners active in education,
which has an official seat at the table to guide the Education Sector Plan. Similarly, EFA National
Committees, which have varying degrees of functionality in the region, are comprised of governments,
NGOs and private sector partners and are responsible for developing and monitoring EFA National Plans.
As part of this, UNICEF continues to advocate with Ministries to ensure that National EMIS include data
on private schools (both registered and unregistered) as well as schools run by faith-based organizations
and NGOs.
UNICEF is also active in broadening the scope of Corporate Social Responsibility (CSR). In addition to
partnering with large private sector companies, such as IKEA or AEON to provide resources for education
projects, UNICEF also encourages the private sector to take a seat at the policy table., Recently, in early
2010, CISCO agreed to become a full member of the UN Girls’ Education Initiative (UNGEI) Global
Advisory Committee, the first private sector company to do so. Plans for a concept note and technical
Asian Development Bank. 2002. Education Policy, Manila, p. 40.
Asian Development Bank. 2008. Strategy 2020 The Long-Term Strategic Framework of the Asian
Development Bank 2008-2020, Manila, p. 20.
89 Asian Development Bank. 2008. Education and Skills: Strategies for Accelerated Development in Asia and the
Pacific, Manila.
90 Asian Development Bank. 2010. A Review of Public Private Partnership in ADB Education Lending 20002009, Manila.
87
88
39
paper on the role of PPP in promoting child rights is also being planned, and will certainly benefit from
the lessons learned in the collaboration with ADB.
VI.
MOVING FORWARD
Private sector providers present a significant resource for improving access and quality in education. In
most countries in East Asia and the Pacific, a range of private providers exists to meet the demand for
education. Private education is likely to remain a major force in the overall market for education, with
or without State support. The State can foster a dynamic private sector and can harness its strengths by
introducing well-designed policy frameworks and by promoting PPPs that improve education provision
for the poor. To be successful, PPPs must be effectively designed and implemented.
Building on our respective strengths, the ADB and UNICEF can promote enhanced understanding of NSPs
and the potential for PPPs to leverage resources toward achieving the goals of education for all. Several
critical areas can be supported as part of our existing efforts:




Building the evidence-base:
Country-level situational analyses are critical first steps to
understanding the scale and nature of private sector providers, as well as the legal, political and
regulatory frameworks that impact their ability to reach the disadvantaged. Piloting of successful
PPP models, particularly those based on lessons available from ADB and UNICEF programs
worldwide can also be a way to build evidence of effective, sustainable measures to
design/implement PPPs.
Policy Advocacy: ADB and UNICEF can also collectively advocate for PPP policies that ensure a “level
playing field” for private sector providers serving the poor. Again, the evidence-base from our
programs, at both programmatic and policy levels, can be great resources for policy advocacy, and
the CRC and EFA commitments provide legal and political basis to hold governments accountable to
action.
Capacity building of governments and private sector providers: In general, governments have
relatively limited experience working with the private sector, and therefore, human resource
capacity to develop and manage PPPs is often weak. Private providers also need capacity
development to ensure delivery of quality services. ADB and UNICEF have long engaged in capacity
development of governments as well as private, community actors, and such support should also be
extended for PPPs.
Coordination: Governments and private sector traditionally do not have a common platform
whereby they come together for policy dialogue. Private sector providers are also likely to be very
diverse and unorganized particularly small-scale actors, rendering it difficult to voice their common
issues and concerns during policy development processes. Coordination among various types of
private sector providers as well as with government is an important area ADB and UNICEF can
support.
40