Innovative Public-Private Partnerships on Education and Health Harry Patrinos, Felipe Barrera, Juliana Guaqueta HD Learning Week November 2008

Outline 1. Why PPPs in Education? 2. Understanding PPPs in Education 3. What do we know about PPPs? 4. Bank Netherlands Partnership Program (BNPP)

Why Public-Private Partnerships?

Why PPPs? Need to increase access, equity and achievement in the education sector. PPPs Rationale: Increased choice and greater accountability Pulling in a greater group of providers and private capital investments Less constraints on financial and human resources management. Better value for money can be achieved through the exploitation of private sector competencies Some of the arguments that support private school operation are: 1. Improving the efficiency and effectiveness of health and education services in low income countries is crucial for reaching the MDGs (by means of increased school choice, greater accountability to direct beneficiaries). 2. (By pulling in a greater group of providers and private capital investments to the service of poor students) 3. (By allowing non-government organizations deliver health and education services which will face less constraints on financial and human resources management leading to cost-efficiencies) 4. The successful PPP project is based on the concept that better value for money can be achieved through the exploitation of private sector competencies and the allocation of risk to the party best able to manage it.

Private enrollment rates increased between 1991-2003 Governments can contract private education providers Enrollment rates remain low and quality of education lags considerably Public remains an important player Private sector is playing an increasingly important role (private enrollment rates grew by 58% & public grew 10% between 1991-2004) Successfully delivering services requires accountability Government can guide policy and financing while private sector delivers the service The governments of many developed countries are finding ways to leverage the capacity and expertise of the private sector to provide education. In a subset of OECD countries, more than one-fifth of public expenditure is transferred to private institutions, either directly or by subsidizing households to pay for the school of their choice. Moreover, on average, OECD countries spend 12% of their education budgets in education institutions that are privately managed. These governments have financed a wide variety of schools on a per pupil basis to meet demand for different kinds of schooling. In the United States, the number of private companies providing supplemental academic services (academic tutoring) increased by 90 percent in just one year, between 2003 and 2004. Source: UNESCO

Understanding PPPs

Finance and Provision

Framework and International Experience Contract Types Example Management, professional services (input) United Kingdom, Colombia, Senegal, Pakistan Operational services (process) Qatar, Colombia, United States Education services (output) Pakistan, Netherlands, Chile, Cote d’Ivoire Facility availability (input) Belgium, UK, Australia, Canada, Egypt, Germany Facility availability and education services (input and output bundle) None so far

PPP Continuum Low High Moderately Strong Very Strong Absent Weak Democratic People’s Republic of Korea Mexico Argentina Cote d’Ivoire Qatar Netherlands Public provides, finances, regulates education services Contracts with private schools to provide a portion of education. Private Management of public schools Vouchers Funding follows students. Subsidies to inputs private schools Private schools

What do we know about Public-Private Partnerships? Contracting Out Education “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

What does existing evidence suggest? 1. Private operation of public schools tends to yield higher test scores after initial years (US, LAC) 2. Targeted vouchers can improve academic outcomes, especially for the poor (Colombia) 3. Universal vouchers generate no robust conclusions (Chile) 4. Few empirical studies of the impact of PPPs 5. Need to evaluate how PPPs work most effectively in different contexts and which characteristics of private operation make them perform better than public schools Some of the evidence of public provision of private services on education outcomes so far is positive but is not enough to justify either ignoring PPPs or expanding them on a large scale. The small number of studies that have been carried out so far suggest that contracting out to the private sector can have several benefits, including greater efficiency, increased choice, and wider access to education, particularly for those households who have been poorly served by traditional methods of providing education. In general, private management of public schools tends to be efficient and yield higher test scores than public institutions when students reach the end of basic education. In addition, despite being controversial, vouchers can improve academic outcomes, especially for the poor. However, few of the existing empirical studies of PPPs can be considered to have yielded robust conclusions. There is a need to evaluate how PPPs work most effectively in different contexts, particularly where contracting models need to be improved or fine-tuned and in countries where partnerships are still nascent. While much is known about funding school choice, much less is known about which characteristics of charter and concession schools make them perform better than public schools. More research is also needed on universal versus targeted school choice and on private finance initiatives.

Bank Netherlands Partnership Program (BNPP) Objective: increase empirical knowledge on PPP programs Case Studies: 4 health, 5 education, 1 descentralization in health Geographical coverage: AFR, LAC, SAR, EAP There are: Four case studies on contracting of health services out to private and non-profit sectors to improve maternal and child health (Congo, Nigeria, Rwanda and Pakistan); Five on the provision of financing and technical support to private schools and impact of provision of internet access by PPPs to low-income communities (Kenya, Pakistan [x2], Philippines, and Mexico); One case study of decentralization or giving voice to the communities in the provision of health services (Argentina).

Innovative Service Delivery Contracting health services out to private and non-profit sectors (Congo, Nigeria, Rwanda and Pakistan); Provision of financing and technical support to private schools (Kenya, Pakistan [x 2], Philippines, and Mexico); Decentralization or giving voice to the communities in the provision of health services (Argentina) Four case studies on contracting of health services out to private and non-profit sectors to improve maternal and child health (Congo, Nigeria, Rwanda and Pakistan); Five on the provision of financing and technical support to private schools and impact of provision of internet access by PPPs to low-income communities (Kenya, Pakistan [x 2], Philippines, and Mexico); One case study of decentralization or giving voice to the communities in the provision of health services (Argentina).

Evaluation Designs Experimental Countries Randomization Rwanda, Kenya, Philippines, Pakistan (E-BESP), Mexico Quasi-Experimental Regression Discontinuity Pakistan (E-FAS) Differences-in-differences Pakistan (H), Argentina Matching Pakistan (E)

Transport Subsidy Pakistan PPP Continuum Low High Moderately Strong Very Strong Absent Weak Moderate Strong AGEs Mexico FAS Pakistan Transport Subsidy Pakistan Public provides, finances, regulates education services Contracts with private schools to provide a portion of education. Private Management of public schools Vouchers Funding follows students. Subsidies to inputs private schools Private schools