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Public Private Partnerships (PPPs)

Norman LaRocque and Sena Lee

UNICEF, 2011


Access to education is considered a basic human right and the role of the state in delivering this right is legally codified in international rights treaties including the Convention on the Rights of the Child. Yet, states throughout East Asia and the Pacific face persistent budgetary and institutional constraints that plague both the coverage and quality of education services limiting the fulfilment of this right. Capacity constraints coupled with the increasing demand for education have resulted in an increase in the number of private actors (businesses, NGOs, faith-based organizations and civil society) engaged in service delivery. This 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 have seen the introduction of more sophisticated forms of private involvement in education.

It is increasingly rare to find education systems funded and provided solely by the state. As a whole, the East Asia and Pacific region has the second highest share of global public expenditure on education, but this is considerably less than their share of global wealth. In contrast, private expenditure on education is estimated to be high in the region, due to various types of user fees, whether direct tuition fees or indirect fees such as the cost of uniforms, textbooks, etc. Private expenditure makes up a large percentage of total expenditure on primary to post-secondary, non-tertiary education in Indonesia and the Lao People’s Democratic Republic– higher than relatively affluent countries like Japan. This contradicts the popular notion that private education is not prevalent in low- income countries. While it is generally true that most spending goes toward private education institutions, private financing of public education is also common.

Despite its prevalence, private provision is still a contentious issue in the region. Private funding and delivery of education services are often perceived as a threat to state authority (rather than complementary or agents of government programmes). In the case of for-profit institutions, the profit motive is often viewed as incongruent with the perception of education as a social rather than commercial good. Because of this, governments across the region have been reluctant to recognize explicitly the role played by the private sector in their legislation or in education plans and strategies developed across the region. Some governments have banned the existence of private schools or have limited the number of schools that can be established. Private sector providers serving low-income communities are often not captured in national data, as the incidence of non-registration among private providers, especially small-scale, NGO-type providers, is relatively high compared to urban, large-scale private providers. Others choose to remain unregistered and thus not under the purview of government, due to the existence of legal and regulatory hurdles that may restrict their operations. This raises issues relating to quality, especially for poor communities where children predominantly attend unregistered schools and have no legal or regulatory protection.

Where alternative private providers are engaged in education services, it is the state’s responsibility to regulate and monitor these services to ensure appropriate standards and equality of opportunities. Importantly, more countries are recognizing the existence of the non-state sector and the utility of using non-state providers for advancing national education goals and priorities. Public-private partnerships (PPPs) with non-state providers can take many forms and the goal often is the same – expanding quality education for all while reducing costs. In PPPs, the public sector defines the scope of outputs, while the private sector is in charge of delivering on them.

In order to operate effectively, PPPs require a vibrant and dynamic private education sector. Despite the  significant role played by private education in the region, there are few PPPs in operation in EAP countries compared to other regions. Overly complex school registration criteria and processes; inconsistent enforcement of regulations, leading to corruption; overlapping jurisdictions; weak legal frameworks; and funding restrictions for private schools restrict further private sector engagement. Providing legal recognition for private providers, both for-profit and not-for-profit, is a first step to building political and public support for private sector involvement in education. Legal recognition is slowly evolving across the region. The People’s Republic of China and the Philippines already provide explicit constitutional or legislative recognition of the private sector’s role in education. Improvements are also being made in streamlining school registration processes, for instance ensuring that registration is time-bound and that establishment requirements are transparent.

Non-state providers present a significant resource for improving access and quality in education, and they are 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 their respective strengths, the ADB and UNICEF can promote better understanding of non-state providers and the potential for PPPs to leverage resources toward achieving the goals of Education for All. Knowledge generation, policy advocacy and developing capacity and partnerships for PPPs are areas in which ADB and UNICEF can collectively contribute to ensure that services provided fit broader cost, quality, and equity needs.

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