Public-Private Partnerships in Education

Contracting Forms

Harry Anthony PatrinosThe World Bank

2010

75 Million Children Out of School Low Academic Achievement

Private Enrollment 1991-2003Returns to Education by Level

26.6

18.917.0

13.1

19.0

10.8

0

5

10

15

20

25

30

35

Primary Secondary Higher

Private Social

Latest estimates (97 countries)

113%109%

12%

1%

76%

21%

52%

15%

-13%

-1%

18%

-5%

-20%

0%

20%

40%

60%

80%

100%

120%

Africa ArabStates

LatinAmerica

Pacific South &East Asia

CentralAsia

Private

Public

Premise

Government’s Role• Externalities• Capital market

imperfections• Agency concerns• Equity• Information asymmetries

Variety of Instruments• Ownership/Delivery• Funding• Regulation/Information

PPPs can be defined as a contract that a government makes with a private service provider to acquire a specified service of a defined quantity and quality at an agreed price for a specified period

Provision

Finance Private Public

Private

Private schools Private universities Home schooling Tutoring

User fees Student loans

Public

Vouchers Contract Schools Charter schools Contracting out

Public schools Public universities

Framework

Nascent IntegralEmerging EngagedLacks

Public provides, finances, regulates education services

Vouchers, Loans, Scholarships. Funding follows student.

Moderate

Subsidies to private schools

Contracts with private schools to provide a portion of education.

Private schools

Low PPP High PPP

100% Public 100% Private

Private Management of public schools

PPP Continuum

PPP Continuum and Coverage

0102030405060708090

100

Bangladesh Philippines United States Netherlands

Emerging Moderate Engaged Integral

Co

vera

ge

69%

9%5%

100%

Benefits of PPPs

• Efficiency• Service delivery• Specialized skills• Overcome public service restrictions• Quicker response

Concerns

• Contracting out services is controversial– Privatization– Socioeconomic segregation– Poorer students left behind

But these are empirical questions• Base decisions on facts, not opinions• How to evaluate

Issues

• Resistance from certain stakeholders– Teachers and other employees– Civil service

Can block, severely delay, stifle reforms…• Consultation• Quality of contract design, implementation→ Create credible evidence

Empirical strategy

Country & study Outcome variable

Result

Randomization Colombia (Angrist, Bettinger & Kremer 2006)

Test scores 0.2 SD

Colombia (Angrist et al 2002)

Test scores 0.2 SD

Korea (Kang 2007) Test scores; peer effects

1 SD increase in quality of peers enhances math scores at 0.25 & 0.50 quantiles by 0.47 & 0.42 SD

Instrumental variable

Chile (Hsieh & Urquiola 2006)

Test scores Sorting, through peer effects

Chile (Gallegos 2004)

Test scores

0.20 SD

Chile (Contreras, Bettinger & Sepulveda 2008)

Test scores 0

Sweden (Sandström & Bergström 2004)

No failing grades Competition improves public schools

Netherlands (Himmler 2007)

Test scores Competition promotes achievement

Denmark (Andersen & Serritzlew 2006)

Test scores Competition does not improve scores

Heckman correction

model

Chile (McEwan 2001) Test scores Catholic voucher outperform Chile (Sapelli and Vial 2004)

Test scores 0.5 SD

Chile (Elacqua Contreras & Salazar 2008)

Test scores Franchise schools 0.20 - 0.50 SD > private independent schools

Evidence on Private School Choice

Education Service Contracting:The Philippines

Concession Schools:Bogotá, Colombia

Private Education Provision and Public Finance: The Netherlands

Thank you

Harry Anthony Patrinoshpatrinos@worldbank.org