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Education is a human right, which states have the responsibility to ensure. But they need not be the sole provider. Private involvement can increase financial resources committed to education and supplement state capacity to absorb growing demand while assuring standards. While there are various ways in which the private sector can be involved, a strong regulatory framework is vital to ensure high quality and equity, at the same time encouraging investment and competition.

If governments in emerging and developing countries are to reach the 57 million children currently out of school while ensuring that the 250 million children in school who cannot read or write are learning, all available educa­tion options should be evaluated and accessible. While governments are, and should continue to be, the stewards of education systems, it is im­portant to acknowledge and understand both the potential of the private sector and the real­ity that the non-state sector is supplying signifi­cant education services in many contexts.

The association of the non-state sector with ei­ther non-governmental organisations (NGOs) ensuring education for under-served groups or quality private institutions serving wealthy students is too simplistic – private entities are increasingly providing education to even the poorest (Bold et al., 2011). Although it is often assumed that non-state schools have flourished as the only option for those who cannot access state schools, in fact poor families often actively opt for the private sector largely in response to inadequate quality in state services, or because they prefer a more responsive and accountable system, or they are seeking an education that better reflects their interests and values.

The private, or non-state sector, in education can include independent, community-based, NGOs, faith-based organizations, trade un­ions, private companies, small-scale informal providers and individual practitioners. Between 1990 and 2010, the percentage of students in low-income countries attending private primary schools doubled, from 11 to 22% (Baum et al., forthcoming), and in more than 70 countries over a fifth of all students go to either private pri­mary or secondary schools.

The forms of private involvement in education

The main rationale for involving the private sec­tor is to maximize the potential for expanding equitable access to schooling and for improv­ing learning outcomes. Private involvement in education can help to increase the level of fi­nancial resources committed to the sector and supplement the limited capacity of government institutions to absorb growing demand. There is also increasing evidence to suggest that the private sector is well equipped to meet the grow­ing differentiated demands of specific groups, for example, religious ones – even when the state provides sufficient places in public schools and universities.

To understand the role the private sector could play and realise the potential benefits that its involvement could provide, an understanding of how countries are currently engaging with the  private sector is required. A government has several options involving different financing and provision solutions: independent private schools, government-funded private schools, privately managed schools, and voucher schools. Independent private schools are fund­ed, owned, and contracted completely separate­ly from the state system. Government-funded private schools are run by non-state providers that receive support from the government in the form of direct payments, bursaries, grants, subsidies, or a transfer of schools resources such as textbooks. Privately managed schools are funded by the gov­ernment but managed by private entities. These schools often have to meet performance bench­marks or other learning output measures through a charter or contract with the government. Voucher pro­grammes typically involve the government pay­ing private operators based on the number of enrolled students.

The added value of private education

Increased private involvement can improve pedagogic, technical and management skills across all levels of education. Additionally, its greater management flexibility means that pri­vate schools can more easily introduce curricu­lar and programme innovations and improved assessment techniques. Some studies show that the learning outcomes in private schools are equal to or better than those of public school students (Box 1). In Andhra Pradesh, India, for example, a school voucher scheme has been shown to save the state more than two-thirds of pupil capitation, while enabling the students to significantly improve results across all subjects. Indeed, despite students spending less time learning mathematics and language, and al­though their teachers had lower levels of formal education and training than their public-school peers, the private-school voucher students achieved significantly better overall results. Pri­vate schools appear to have a longer school day and school year, smaller class sizes, lower teach­er absence and extra time devoted to other sub­jects – English, science, social studies and Hindi – (Muralidharan and Sundararaman, 2013).

The potential of engaging private sector in education

In Pakistan, a 1990 to 1999 boom led to 8,000 new private schools being set up in urban and rural areas, reaching low- and high-income households. For the poorest in rural areas, the share of private schools increased 6%, with schools charging less than a dime a day. Private provision has helped to increase rural enrolment and from low-income household (Andrabi et al., 2006).

In Kenya, unrecognized, low-cost or affordable private schools are having a large effect on test scores, although nearly two-thirds of them operate at lower cost than median government schools (Bold et al., 2011).

In 2000, the Government of Bogota, Colombia, built 25 state of the art schools in the poorest parts of the city and leased them, through competitive bidding, to private operators on 15-year contracts. More than 26,000 students have benefited, with rigorous impact evaluations revealing that students in these concession schools are less likely to drop out and that their test scores improved (Barrera, 2007).

The Non-Formal Primary Education Program of Bangladesh’s NGO BRAC has grown over the last 20 years to serve more than 1.5 million children in over 20,000 pre-primary and 32,000 primary schools – 11% of the country’s primary cohort. The curriculum is the same as government schools, but they enrol and retain more hard-to-reach children, such as girls, who make up 65% of their pupils.


Other studies show that private providers can be more cost-efficient, being able to operate at lower costs than their government counter­parts, while achieving the same or better results. Parent involvement in private school has also demonstrated to have positive effects on learn­ing, teacher motivation, student attendance, etc., while active engagement results in fami­lies and communities holding schools account­able to a much greater degree. Indeed, research has consistently shown that when parents are involved in their children’s education, students do better. In this, fee-paying schools have an ad­vantage that state schools do not – the fact that parents are free to choose or change their child’s private school means that there is a built-in ac­countability mechanism.

The need for strong regulation

Whatever its apparent advantages, private sector engagement in education, nonetheless, requires a strong regulatory framework to ensure high-quality delivery and equity while at the same time encouraging investment and competition. Too often, regulation is poorly developed and discourages private investment without any gain in educational quality. Indeed, enforced standards are key to ensuring the long-term sustainability of the private education sec­tor and its credibility in the market. Perceptions of the quality of private education are funda­mental and can be easily damaged – bad public­ity about private providers offering poor quality can harm the reputation of the whole sector. The World Bank’s Systems Approach for Better Education Results (SABER) – Engaging the Pri­vate Sector (EPS) tool supports governments to strengthen or establish a strong regulatory environment. The tool collects data related to four key policy areas – encouraging innovation by providers; holding schools accountable; em­powering all parents, students, and communi­ties; and promoting diversity of supply – that international evidence has found effective for strengthening education service delivery and accountability amongst stake­holders.

Autonomy has been found to improve learning outcomes in both public and private schools with most high-achieving education systems allowing schools to make their own decisions about teacher hiring prac­tices, curriculum development or resource al­location. Decision-making at the school level enables the creation of a learning environment best suited to students’ needs (Hanushek et al., 2013; Bruns, Filmer, and Patrinos, 2011; Baum et al., forthcoming). But autonomy must, in turn, be reinforced by accountability to en­sure schools are delivering quality education through clear learning and teaching standards (Bruns, Filmer, and Patrinos, 2011), with sanctions enforced if standards are not maintained. In a strong regulatory environment, holding pro­viders accountable comes both from the govern­ment, as well as parents, students and communi­ties in which the schools operate. Empowering parents, students, and communities means that parents are aware of the learning, or the lack of it, taking place in their child’s school. They should also be able to use their voices to hold the school and government accountable regardless of their socio-economic background.

Finally, governments should enable a variety of providers to enter the market, as this will increase client power and enable citizens to make informed choices about where to send their children (Baum et al., forthcoming). Availability of transparent in­formation is key to help parents either make choic­es regarding schooling or advocate changes and improvements in schools. All this, however, relies on governments having the capacity – human and financial – to monitor, report on and enforce com­pliance (Box 2).

Ensuring regulation compliance: the Punjab education foundation

The provision of incentives – access to subsidies, credit, training and other resources – for the private sector, in exchange for compliance to regulations, can prove highly efficient. Launched in 2005, the Punjab Education Foundation Foundation-Assisted Schools programme has enable 1.2 million poor students in Pakistan to attend non-state primary and secondary schools. The schools are first evaluatedagainst quality and cost-effectiveness criteria, and once selected, on condition that they abolish entrance criteria and fees, schools receive a monthly per-student enrolment subsidy for up to 500 students. Subsidies are conditional on minimum learning levels: schools are ejected if they fail to achieve a minimum pass rate in two consecutive tests. Sharp regression discontinuity estimates show that the threat on schools that barely failed the test for the first time induces large learning gains. The large change in learning between the first two test rounds is likely attributable to the accountability pressure given that a large share of new programme entrants failed the first test round. An earlier study showed evidence of significant impact on the number of students, teachers, classrooms and blackboards in the selected schools (Barrera-Osorio et al., 2011).


Education is a basic human right and governments have the responsibility to ensure and protect this, but the state need not be the sole provider. An ed­ucation system that acknowledges public and pri­vate providers and has accountability mechanisms to strengthen service delivery amongst the various education stakeholders. Governments can guaran­tee access to education through finance and pri­vate provision. Good ideas need to be piloted and subjected to rigorous assessments, the results of which should then be used to adjust programmes accordingly and successful pilots then scaled up as appropriate.

References / Andrabi, T., Das, J., Khwaja, A.I., 2006. A Dime a Day: The Possibilities and Limits of Private Schooling in Pakistan. World Bank Policy Research Working Paper 4066. Washington DC., USA. // Barrera-Osorio, F., 2007. The impact of private provision of public education: empirical evidence from Bogota’s concession schools. World Bank Policy Research Working Paper 4121. Washington DC., USA. // Barrera-Osorio, F., 2011. Evaluating public per-student subsidies to low-cost private schools: regression-discontinuity evidence from Pakistan. World Bank Policy Research Working Paper 5638, Washington DC., USA. // Baum, D., Lewis, L., Lusk-Stover, O., Patrinos, H.A. forthcoming. What Matters Most for Engaging the Private Sector in Education: A Framework Paper. SABER Working Paper Series. World Bank, Washington DC., USA. // Bold, T., Kimenyi, M., Mwabu, G., Sandefur, J., 2011. The High Return to Private Schooling in a Low-Income Country. Working Papers 279, Center for Global Development, Washington DC., USA. // Bruns, B., Filmer, D., Patrinos, H.A., 2011. Making Schools Work: New Evidence on Accountability Reforms. World Bank, Washington DC., USA. // Hanushek, E., Link, S., Woessmann, L., 2013. Does school autonomy make sense everywhere? Panel estimates from PISA. Journal of Development Economics 104: 212- 232. Elsevier, Amsterdam, Netherlands. // Muralidharan, K., Sundararaman V., 2013. The Aggregate Effect of School Choice: Evidence from a Two-stage Experiment in India. NBER Working Papers 19441. Cambridge, Massachusetts, USA.