International Evidence on Public-Private International Evidence on Public-Private Partnerships to Improve Access and Quality Partnerships to Improve Access and Quality

in Educationin Education

Harry Anthony PatrinosWorld Bank

October 2007

Public-Private Partnerships: DefinedPublic-Private Partnerships: Defined

No fixed definition of PPPs

Definitions differ in terms of scope and formality of arrangements

Various definitions: “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

Common ElementsCommon Elements

Formal arrangement with contractual basis

Involve public and private sectors

Outcome focus

Sharing of risks/rewards between public and private

sectors

Recognize complementary role of public and private

sectors

Role of Government in EducationRole of Government in Education

Rationale for government involvement in education: • Externalities• Capital market imperfections• Agency concerns• Equity• Information asymmetries

Government has a variety of policy instruments at its disposal in order to meet its policy objectives:

• Ownership/Delivery• Funding• Regulation/Information

PPPs recognise that governments can meet their policy objectives using different service delivery models – not just ‘traditional’ public finance/public delivery model

Financing and ProvisionFinancing and Provision

Provision

Financing 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

Benefits of Public-Private PartnershipsBenefits of Public-Private Partnerships

Increase efficiency – improved performance incentives and increased competitive pressure

Improved quality of service delivery

Secure specialized skills that may not be available in government agencies

Overcome public service operating restrictions – obsolete salary scales, out of date civil service work rules, etc

Permit quicker response to changing demands and facilitate adoption of service delivery innovations

Benefits of PPPs (cont’d)Benefits of PPPs (cont’d)

Benefit from economies of scale regardless of the size

of the government entity

Allow government agency to focus on functions where it

has a comparative advantage

Increase access, especially for groups who have been

poorly served under traditional forms of service delivery

Increase transparency of government spending by

making the cost of services more visible

Types of PPPs in EducationWhat government contracts for Definition Contract types

1 Management, professional

services (input)

Government buys school

management services or

auxiliary and professional

services

Management contracts

Professional services contract

(curriculum design)

2 Operational services (process) Government buys school

operation services

Operational contracts

3 Education services (output) Government buys student

places in private schools

(contracts with school to enroll

specific students)

Contract for education of specific

students

4 Facility availability (input) Government buys facility

availability

Provision of infrastructure

services contracts

5 Facility availability and education

services (input and output

bundle)

Government buys facility

availability combined with

services (operational)

Provision of infrastructure

contracts with education services

contracts

Source: World Bank 2005

Examples of Education PPPsExamples of Education PPPs

Government contracting with private schools

Private management of public schools

Infrastructure PPPs

Vouchers/subsidies

Public/private sector affiliation arrangements

Private sector regulation

Innovation and research PPPs

Examples of PPPsExamples of PPPsType of PPP Examples

Contracting for the Delivery of Education

Services

Government sponsorship of private school students, Cote d’IvoireEducation services contracting, PhilippinesAlternative education, New ZealandUniversal post primary education & training policy, UgandaFe y Alegria, South America & Spain

Private Management of Public Schools

Concession schools, Bogota, ColombiaRailways schools, PakistanIndependent schools, QatarQuality education for all, Punjab, PakistanCDG Lahore/CARE schools, PakistanContract and charter schools, USATransformed schools, China

Infrastructure PPPs

Private Finance Initiative, UKProyecto Prestacion de Servicios, MexicoNew Schools Private Finance Project, AustraliaPPPs for Educational Infrastructure, CanadaOffenbach & Cologne Schools Projects, GermanySwinburne University of Technology, AustraliaNational Maritime college, IrelandMontaigne Lyceum, The Hague, Netherlands

Examples of PPPs (cont’d)Examples of PPPs (cont’d)Type of PPP Examples

Vouchers/Subsidies

PACES, Colombia

Targeted individual entitlement, independent school subsidies, New Zealand

Private school subsidies, Cote d’Ivoire

School funding, Netherlands, Denmark, Sweden

Milwaukee Parental Choice Programme, USA

Punjab Education Foundation programs, Pakistan

Private Sector Quality Assurance USA, Oman, Philippines

Public/Private Sector Affiliation Arrangements

Ghana, Sri Lanka, Pakistan, China, New Zealand, South Africa

Innovation and Research PPPs

Government programs encourage industry-public research institute research. Netherlands Government programs encourage industry-research institute partnerships and promote commercialization of public research, Australia

Contracting Models in Latin AmericaContracting Models in Latin AmericaModel Country Program

Latin America and Spain

Fe y Alegría

Colombia Bogotá’s Concession Schools

Management contracts

Professional services contract (curriculum design)

Operational contracts Venezuela Venezuelan Association of Catholic Education

Colombia PACES (vouchers for low income students)

Contract for education of specific students

Chile Universal vouchers

Provision of infrastructure services contracts

Mexico Projects for the Provision of Services-University of San Luis Potosi

Provision of infrastructure contracts with education services contracts

N/A N/A

ProgramsPrograms

Private management of public schools• Management contracts, professional services, operational contracts• Charter schools, concession schools, etc.• Involves governments or public authorities contracting directly with private

(for- & non-profit) providers to manage public school• Schools remain ‘free’ to students – no fees • Schools responsible for all aspects of school operation • Used mostly in disadvantaged areas

Contract for education of specific students• Vouchers, scholarships, direct funding of private (& public) schools

Evidence on PPPsEvidence on PPPs

Limited rigorous evidence on impact

Ideal evaluation involves random assignment & use true control group

or natural experiment

Much debate over impact of vouchers in Chile and USA, remain

controversial

Many studies on impact of charter schools, though few randomized

trials

USA: EMO Managed Schools/EnrollmentsUSA: EMO Managed Schools/Enrollments

135

230

285

368

406

463

535

0

100

200

300

400

500

600

1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05

Nu

mb

er

of

Sc

ho

ols

0

50,000

100,000

150,000

200,000

250,000

300,000

En

rollm

en

ts

Schools Under EMO Management Enrollments

National Charter School Research Project 2007

Fe y Fe y AlegríaAlegría Schools in South America Schools in South America

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

Concession Schools, Bogota, ColombiaConcession Schools, Bogota, Colombia

Private schools contracted to manage poorly performing public schools

25 schools serving over 26,000 students – disadvantaged students

Autonomous

15 year contract

Designed to overcome problems faced by public schools – inability of schools to hire own staff, lack of labour flexibility, bureaucracy

Schools paid $500 per student per year – below public school unit cost

7,007

19,374

21,430

23,117

26,308

0

5,000

10,000

15,000

20,000

25,000

30,000

2000 2001 2002 2003 2004

En

rollm

ents

Evaluation of ProposalsEvaluation of Proposals

quality of proposal 30%

profile of admin. & teachers

30%

student performance30%

student allocation requested

10%

Monitoring & EvaluationMonitoring & Evaluation

Inspect school property administration

Supervision visits to observe adherence to pedagogical norms and

standards

Independent evaluation of finances to see if academic objectives

met

Impact EvaluationImpact Evaluation

Propensity score and matching estimation technique (Barrera 2006)

Hypotheses:• Dropout rates are lower in concessions schools than in similar, public schools• No effects (yet) or small ones on test scores• Nearby schools have lower dropout rates than public schools outside the

influence of concessions

Test ScoresTest Scores

42

44

46

48

50

52

noconcesion concesion

privado publico publico

mean of matematicas1 mean of fisica1mean of biologia1 mean of lenguaje1

Public schools have lower test scores

Concession and public non-concession schools are “similar”

FindingsFindings

Strong evidence of a direct effect of Concession Schools on

dropout rates and some evidence that they had an impact on

dropout rates on nearby public schools

Positive impact on students’ test scores relative to those in public

schools

Dropout rates were 1.7 points lower, while mathematics and

language scores were 1 point and 2 points higher than students in

similar public schools

Dropout Results: ImpactDropout Results: Impact

Matching:

•10 nearest estimators, common support, balance groups

•Direct Effect: reduction in 1.7 points dropout rates

•Indirect Effect: reduction in 0.82 points

Matching

Varible: Dropout rate

Difference Treatment-ControlUnmatched -0,0130 -0,0069ATT -0,0173 -0,0082

Bootstrap statisticsRepetitions 1000 1000Standard error 0,0039 0,0096317Bias-corrected conf. interv. -0,0244 -0,0112 -0,0341 0,0004

Impact variable: Dropout rate Impact variable: Dropout rate

Direct impact over dropout rate Indirect impact over dropout rate

Test Results: ImpactTest Results: Impact

Matching:

•10 nearest estimators, common support, balance groups

•Effect over math test scores: improvement of 2.4%

•Effect over language test scores: improvement of 4%

Matching

Varible: Test scores

Difference Treatment-ControlUnmatched -0,2099 0,6234ATT 0,9732 1,9364

Bootstrap statisticsRepetitions 100 100Standard error 0,522 0,748Bias-corrected conf. interv. 1,2684 1,4655 1,5501 2,8472

Impact variable: Mathematics Impact variable: Languaje

National Voucher Program, ChileNational Voucher Program, Chile

Nationwide voucher program implemented in 1980

Applies to public & private schools – secular & religious

Monthly payments made to schools on per-student basis

Voucher schools must follow operational guidelines (basic facilities, certified teachers, class size)

Vouchers cover most or all tuition at eligible schools

Enrollments Shares, Public vs Private Enrollments Shares, Public vs Private Schools, ChileSchools, Chile

53

34.2

3.8

0

10

20

30

40

50

60

Public Schools Co-financed Private Schools Fully Subsidized Private Schools

Perc

ent

Test Score Effects from Selected Studies Test Score Effects from Selected Studies on Chile Voucher Programon Chile Voucher Program

Private Subsidized Catholic Subsidized Private Non-subsidized

Bravo et al (1999) = +

Gallegos (2002) +

Carnoy & McEwan (2000) - + +

Mizala & Romaguera (1999) = +

Sapelli (2003) +

Vegas (2002) = + +

McEwan (2001) = = =

Mizala & Romaguera (2003) + +

Sapelli and Vial (2002) +

Mizala and others (2004) + +

Source: Adapted from Bellei (2006)

““When Schools Compete, How Do They When Schools Compete, How Do They Compete?”Compete?”

While private enrollment rate increased by 20 points, greater

impacts in larger, more urban, wealthier communities

Hsieh and Urquiola (J Public Economics 2006) use this

differential impact to measure effects of unrestricted choice on

outcomes using panel data for 150 municipalities

They find no evidence that choice improved average outcomes

(test scores, repetition, years of schooling)

They do find evidence that voucher led to increased sorting, as

the “best” public school students left for private sector

More on ChileMore on Chile

Finding a rule about arbitrary assignment to treatment that mimics randomization is very important (Hoxby 2003)

Researchers need to find control schools that were excluded from the reform for some reason that is uncorrelated with factors that affect their future performance

Such arbitrary exclusion can sometimes be found in policy rules or natural events

In some school choice reforms, no arbitrary exclusions exist

When Chile introduced school choice, same law applied across entire country so variation in choice entirely endogenous, and no pre-treatment data exists

Thus, researchers have neither pretreatment trends nor arbitrary assignment to treatment, and none of studies on Chilean vouchers is sufficiently credible to be given much weight

Colombia: Colombia: Plan de Ampliación de Cobertura de la Educación Secundaria (PACES)

Introduced in Colombia in early 1990s

Provided 125,000 vouchers from 1992-1997

Offered vouchers to students entering 6th grade, start of secondary school

Key elements of program:• vouchers available to children from low-income families who had

attended a public primary school & accepted at private school

• renewable subject to satisfactory academic performance

• value = $190; half the cost of private secondary school

• school received voucher funds directly from the bank

• schools were allowed to charge top-up fees; and

• there was minimal regulation of private schools

PACES Voucher, ColombiaPACES Voucher, Colombia

Voucher program designed to give students from poor families access to secondary schooling (Angrist & others 2002, 2006)

Randomized trial – students randomly selected through a lottery system and given vouchers to attend secondary school

Findings:• Lottery winners were 15-20% more likely to attend a private school, 10%

more likely to complete 8th grade and scored 0.2 standard deviations higher on standardized tests

• Program effects larger for girls• Program cost less than the unit cost in the public sector• Longer-term positive effects – lottery winners more likely to take college

entrance exam• Increase in (proxy) high school graduation rates of 5-7 percentage points,

relative to a base rate of 25-30%

PACES Voucher, ColombiaPACES Voucher, Colombia

Indicator Impact – PACES Voucher Students Were:

Years of Schooling 10 percentage points more likely to finish 8th grade

Grade Repetition 5-6 percentage points less likely to repeat a grade than

non-voucher students

Test Scores Scored 0.2 standard deviations higher on achievement

tests

Finished High School 5-7 percentage points higher than non-voucher

students

Take College Entrance Exam 15-20% more likely to take the college entrance exam

College Exam Scores More likely to score 2 points higher than non-voucher

Employment 2.5-3.0 percentage points less likely to be working than

non-voucher students

Being Married or Cohabitating 0.6-1.0 percentage points less likely to be married or

living with someone than non-voucher students

PACES Voucher, VocationalPACES Voucher, Vocational

Voucher skeptics argue that even if vouchers benefit recipients, they do so by improving their peer groups at the expense of others’

Therefore they do no benefit society as a whole

This requires that voucher recipients have more desirable peers than they otherwise would have

Bettinger, Kremer, Saavedra (2007) look at applicants for whom winning voucher did not lead to attending schools with peers with

superior observable characteristics

They focus on those who applied to vocational private schools

Lottery losers were more likely to attend academic secondary schools

Find that lottery winners had better educational outcomes, including higher graduation rates & reading test scores

Casts doubt on argument that voucher effects operate entirely through improving peers available to recipients

Education Contract Options and PotentialEducation Contract Options and Potential

Type International experience Policy suggestion

Voucher Extensive Expand, but based on rigorous

evaluations

Charter schools Significant, inconclusive

evaluation findings

Evaluate; consider

PFIs: Contracting for private

financing and construction of

schools

A few countries have

experience; shown moderate

success

Consider with caution; evaluate

PFIs Contracting for private

actors to run schools, as well as

finance and build them

None (yet) Given potentially high returns,

worth considering, but need a

plan to involve providers and

financiers, and evaluation of

pilot

Contracting Guiding PrinciplesContracting Guiding PrinciplesEnabling policy, regulatory

Split purchaser/provider role

Capacity of contract agency

Transparent, competitive selection

Staged selection process

Performance measures, incentives, sanctions

Effective contract monitoring

Providers maximum flexibility

Long-term contracts with providers

Independent evaluation

World Bank 2006