Last week we started considering the feasibility of introducing public private partnerships in education to deal with the learning challenge — poor quality schools that are not enough to go round. As new administrative tenure commences for most governments at the state level, many are taking stock of their respective fiscal and resource positions to draw up plans on how to deliver the dividends of governance to the public. Coinciding with this exercise under various transition committees is the recent publication of annual states viability index by Economic Confidential which shows that 17 out of 36 states of Nigeria are insolvent. Most of the states are also heavily burdened by huge debts overhang, further threatening their fiscal sustainability. Funding for education as well as other physical and social infrastructure will therefore continue to suffer huge deficit as has been the case beginning from the lost decades of the 80s.
Continued underfunding of education, poor management, overcrowding, poor teacher quality and obsolete curriculum have contributed to the quality deficit in public schools which has partially fueled the proliferation of private schools. Until the mid 1990s, the educational landscape was dominated by good, quality public schools and few schools run by the missionaries. But for the reasons cited above, private schools of varying standards but all seemingly driven by the inordinate quest for profit, have come to dominate the scene. Today, our educational landscape is sharply bifurcated between public schools (mostly substandard, maladministered and cheap) and private schools (different standards but mostly expensive) with few faith-based schools. The explosion in student population has led to overcrowding in public schools thus stretching public resources and whittling down quality. Access to private schools by the teeming population of students is however, limited by high pricing. As we showed last week, even if private schools were to be subsidized, their combined capacity cannot significantly improve access. Both public and private schools have grossly limited capacity to absorb the ever-increasing student population.
We argue that between the ridiculously low fees of public education institutions and the very expensive private education lies a deadweight-loss brought about by this discrepancy — call it a market failure. There is an ostensible gain in admission numbers that is left uncaptured by this bipolar pricing. There is no doubt that a large chunk of eligible university or tertiary institutions candidates who are locked out of the current system, either by lack of space (in public schools) or pricing (in private schools) can be met in-between by more institutions who are not fully publicly subsidized and not fully private. This is our case for the deployment of PPPs in schools.
Government or public sector’s engagement of the private sector for the provision of public goods and services traditionally conceived as government’s responsibility is not recent. In the US for instance, joint public and private sector funding for education has been around since the early 20th century. However, its recent popularity owes to the New Public Management movement for public sector reform which is itself the outcome of perceived failures and limitations of government in providing infrastructure. The argument is to “roll back the state”, decentralize government and adopt output or performance-based standards for public services.
The World Bank and donor agencies have been at the forefront of promoting the adoption of PPPs in public sector service procurement and this seems to have created something of a buzzword around PPP. But the major attraction of PPPs for the government is that PPPs appear to attract additional financing for projects and thus expand the availability of public goods and services. Although the evidence to the success of PPPs in its deployment for infrastructure provision is still tenuous, governments around the world still look up to PPPs as a way of facilitating private provision to help meet an increased demand for public infrastructure. However, there is growing tension around the world that PPP may not be delivering the much-expected dividends. Some critics see it as nothing but a new rent seeking mechanism that socializes costs and risks but privatizes benefits. The World Bank was picketed by anti-PPP activists in its 2018 Spring Meeting who accused the Bank of ignoring negative evidence on PPPs and continuing to promote it. The World Bank seems to have changed track in recent times as it now talks about “blended finance.”
Our position is simply that public funding of private provision of social infrastructure like education, urban renewal, prisons etc. predate the recent PPP-buzz and has really succeeded in improving access, enhancing quality and removing the natural market failure inherent in the bifurcated regime of government provision at one extreme and private provision at another extreme.
As we have argued elsewhere, there is nothing in school-provided education that limits it to government monopoly. It is true that Plato had argued in his Republic that education is too serious a business to be left to private citizens. But the truth is that education is not the same as school. Education, regarding content, modules and practices could well be regulated or “provided” by government. But school is a private good like any other that could be provided in the market place. Just as the market has inherent mechanisms to facilitate efficiency, innovation and utility in the provision of other market goods so it does for schools.
In countries like the Philippines, Spain and the US, PPPs are adopted as cost-effective policy solution to address the access and quality problems like we are facing in Nigeria and indeed, Africa’s education systems. When properly designed and factoring in context-dependent peculiarities, PPPs in education offer the following advantages according to LaRocque (2008): a) increased level of financial resources for education providing better value for money; b) expanded access and reduced governments’ budget constraints; c) access to public education sector of private sector knowledge, skills and innovation; d) allow governments to focus on those functions where they have comparative advantage (planning, policy, quality assurance, and curriculum development); e) allow for greater innovation by focusing on outputs and outcomes, rather than processes; f) allow governments to bypass operating restrictions (especially those related to human resources management: “unnecessarily restrictive employment laws and outdated government pay scales”); g) reduced politicization of schooling and reduced level of corruption in the education sector; h) induced cost transparency through contracts and more accurate costing schemes; i) enhanced competitive pressures on the education sector which propel innovation and efficiency gains.
Several contracting options exist for PPPs in education including vouchers, contract schools, charter schools, contracting out private schools, subsidies to the private sector, and tax incentives for private school consumption. These do not however, foreclose more careful designs following the extant problem-driven iterative adaptation of existing models. Some innovations – call them bricolage – can actually leverage private, public and faith-based models to deliver mechanisms that can serve out peculiar needs.
We argue that government policy makers at the Ministry of Education, Bureau of Public Enterprises (BPE) and Infrastructure Concession and Regulatory Commission (ICRC) should begin to see the learning challenge as something they can address in an innovative way using PPPs. State and Federal education budget, even if it is enough, can only address the challenge of access but can never address the real challenge of quality which we are convinced that the disciplining of the market that PPPs can bring to the table remains the only genuinely effective solution to address the learning challenge of low quality schooling that is grossly insufficient.