Institute for Democracy and Economic Affairs 31 May 2011 Kuala Lumpur, Malaysia Norman LaRocque

1. The Role and Impact of PPPs in Education: Learning from International Experience Institute for Democracy and Economic Affairs 31 May 2011Kuala Lumpur, Malaysia Norman LaRocque Senior Education Specialist Asian Development Bank

2. Introduction

3. Defining Partnerships • Definition of partnership differs in terms of scope, nature and formality of arrangements: • “risk sharing relationship based upon an agreed aspiration between the public and private sectors to bring about a desired public policy outcome.” – Commission on UK PPPs • “cooperative venture between the public and private sectors, 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

4. PPPs: Key Elements • Key Elements: - • Formal arrangement between public and private sectors • Private financing and/or private delivery of public services • Ultimate responsibility remains with public sector • Arrangement often based on explicit contract • Focus on service delivery and outputs/outcomes, not inputs • Sharing of risks/rewards between public and private sectors. • Range of objectives: improved efficiency, enhanced quality, increased access. • Various forms of PPP: • Service delivery • Infrastructure • Finance.

5. Potential Benefits of PPPs • Increase efficiency – improved incentives and increased competition • Improve quality of service delivery • Secure specialized skills not available in sector • Overcome public service operating restrictions – salary scales, civil service work rules • Quicker response to changing demands and facilitate adoption of service delivery innovations • Government focus on areas of comparative advantage • Increase access, especially among poorly served groups • Increase transparency of government spending.

6. PPPs in Global Perspective

7. Classifying PPPs in Basic Education Education Service Delivery Initiatives Infrastructure PPPs Demand-side Financing Programs Education Support Initiatives • Private management of public schools • Contracting with private schools for delivery of education services • Contracting with private providers for the delivery of specialist curricula • Provision of before and after school care • Provision of tutoring services • Outsourcing of ancillary functions at schools • Private Finance Initiatives - finance, construction and maintenance of core and non-core educational assets • Private leasing of public school facilities • Equipment and maintenance of IT laboratories • Private sector school construction • Publicly and privately financed voucher programs • Targeted scholarship programs • Payment of subsidies to students at private schools • Tax credits/tax assistance • Private involve-ment in curriculum development • Private sector involvement in quality assurance • Private information/ testing services • Private sector school review • Scholarships, private voucher programs • School sponsorships, Adopt-a School programs • School construction Philanthropic Initiatives

8. Examples of Partnerships in Education

9. Examples of Partnerships in Education

10. Education Service Delivery Initiatives • Government contracts with private schools to enrol students at public expense or contract private sector to manage non-performing public schools • Often used where there is insufficient public sector capacity and/or quality of public education is low • Key features: • Formal contract • School paid a fixed amount per student enrolled • Education is delivered using provider’s infrastructure or public infrastructure • Schools accountable for performance • For-profit or not-for-profit schools

11. Foundation Assisted Schools (FAS) Program, Pakistan • Key features: • Schools paid Rs350/month for each student they enroll (up to set maximum) • Schools located in poor urban and rural areas • No tuition or other fees • Regular quality assurance tests • Continued program participation dependent on school performance • Rapid expansion – from 54 schools/20,000 students in late 2005 to 1,157 schools/ 500,000 students in early 2008

12. Foundation Assisted Schools Program, Punjab (Pakistan)

13. Educational Service Contracting, Philippines • Government contracts with private secondary schools to enrol students in areas where there is a shortage of public places • Administered by the Fund for Assistance to Private Education, a private not-for-profit organization • Certification program for schools participating in ESC to address ‘ghost students/ghost schools’ issue • In 2008/09, 477,000 recipients, > 2,000 private schools • ½ of secondary schools had ESC grantees in 2008/09 • Per-student payment is PhP4,500

14. ESC Recipients and Schools, 1986/87-2005/06

15. Concession Schools, Colombia • Key features: • Competitive selection process • Newly constructed schools • 15 year contract • Schools paid $US500 per student per year • School autonomy • Operate in disadvantaged areas • Educational outcome targets • Formal contract specifying delivery standards • 25 schools serving over 26,000 students and plans for further schools

16. Vouchers and Voucher-type Programs • Many countries are making use of vouchers and voucher-type programs in education, including subsidies to private schools • More than 30 countries using demand-side financing mechanisms to finance education - vary from small/targeted to full/national programs: • Colombia – PACES program • Swedish school choice program • Denmark, Netherlands, Australia, New Zealand, Canada, Senegal and others – public funding of private schools • Chile – national voucher program • USA – Florida, Milwaukee and Cleveland voucher schemes • Pakistan – Punjab Education Foundation

17. National Voucher Program, Chile • Nationwide voucher program implemented in 1980 • Applies to public and private schools – secular and religious • Monthly payments are made to schools on a per-student basis • Initially, subsidized private schools could not charge top-up fees • Voucher schools must follow certain operational guidelines (eg. basic facilities, certified teachers, class size, etc) • Vouchers cover most or all of the tuition at eligible schools

18. School Infrastructure Initiatives • Governments contract with private sector to design, finance, build and operate school infrastructure • Key features: • Private sector builds schools and operates them for a set period • Schools returned to government at end of contract • Long-term contracts – 15-30 years • Government employs teachers, while private sector employs non-teaching staff • Performance based payments – specified services and agreed performance standards • Examples include Canada, UK, Australia, Germany.

19. PPP for New Schools, Egypt • PPP to build 2,210 new primary and secondary schools in Egypt • First stage involves construction of 345 schools in 18 governorates • Government provides land • Private sector designs, constructs, finances and furnishes schools and provides non-educational services • 15 year contracts

20. Education Support Services • Various forms of educational support are delivered via PPPs – teacher training, school review, performance evaluation • Examples include: • CfBT undertakes teaching/learning support and personnel/evaluation functions in Gulf States • CfBT and Cambridge Education both undertake school reviews/inspections – China, Dubai, Thailand, UK • Public authorities in Colombia contract with the Escuela Nueva Foundation to train rural school teachers, distribute textbooks and update curricula • Punjab Education Foundation trains private school teachers

21. Philanthropy • Wide range of philanthropic ventures in education in many countries – some centrally coordinated/ regulated and others not • Examples include: • Adopt-a-school programs • School improvement programs • School construction • Private sector venture funds • Some countries coordinate/regulate philanthropic initiatives – eg. Philippines, Pakistan

22. League of Corporate Foundations, Philippines • Established 1993 and officially registered in 1996 • Governed by 7 member Board • More than 50 corporate foundations and business organizations • Role: • Provide services to enhance institutional capabilities to member firms • External advocacy role – information, coordination, networking, research • Full time Secretariat

23. Amount of Education Investments, LCF, 2002-2007

24. Adopt-a-School Program, Philippines • Private sector philanthropic venture that provides resources and support to public schools • Key features: • Established 1997 • Public primary, secondary schools and tertiary institutions • Targeted on poorest provinces • Assistance can involve staff development, construction/ upgrading of facilities, books and learning materials and technology • Tax incentives for participating individuals, organizations and firms • $284 million invested from 2000-2008 • Sometimes combined with private management of public schools initiatives

25. Private Sector Support Through Adopt-a-School, Philippines

26. Making Public-private Partnerships Work

27. Regulating for PPPs Provide legal recognition for private education Introduce realistic and objective criteria, and streamlined processes for the establishment and operation of private schools Allow for-profit schools to operate Provide financial incentives to private schools Provide families with information on school performance Encourage philanthropy

28. Regulating for PPPs Establish quality assurance processes Develop government regulatory capacity Promote and facilitate FDI in the education sector Ensure flexible operating environment for private schools Provide support services to schools

29. Other PPP Success Factors • Split purchaser/provider roles within government • Ensure capacity of contracting agency • Transparent, competitive process for selection of PPP providers • Establish appropriate performance measures, incentives and sanctions • Effective contract monitoring framework • Introduce longer-term contracts with providers • Independent evaluation of provider performance

30. Conclusions • Wide range of PPP models available • Increasing international experience with PPPs. Countries have adapted general PPP model to a variety of country and developmental contexts • Considerable interest and growing expertise in PPP design among donor agencies such as ADB • Context important – country governance, financial management/administrative capacity, size/nature of private sector, fiscal situation, demographics • Debate should be about role of government, not whether government is involved or not in education

31. “It doesn’t matter if a cat is black or white, as long as it catches mice.” -Deng Xiaoping

32. ADB Education Website www.adb.org/education

33. nlarocque@adb.org