Can Government Make Private School Markets Work for the Poor?

By Ian MacAuslan

EDOREN has recently launched a new report: “Can education markets work for the poor? Potential learning from the DEEPEN Programme” This provides a review of the ‘Making Markets Work for the Poor’ (M4P) approach, used for the ‘Developing Effective Private Education in Nigeria (DEEPEN) Programme.

DEEPEN is a DFID-funded programme to create an enabling environment for private schools to better educate poor children, improve learning conditions and to raise performance standards.

The core objectives of this review are to:

  1. Assess how similar DEEPEN’s approach is to other programmes using M4P;
  2. Compare DEEPEN’s M4P approach with more conventional approaches to improving private education for the poor;
  3. Identify how other M4P programmes have addressed issues of equity;
  4. Map interventions adopted by other M4P-type programmes which could be relevant to DEEPEN;
  5. Analyze the monitoring and evaluation (M&E) frameworks adopted by these other programmes.

In honour of the report’s launch, EDOREN’s lead on Thematic Research and Policy Impact, Ian MacAuslan, provides a brief discussion of the report’s main conclusions here:

Can Government Make Private School Markets Work for Poor?

In 2008, the Government of Nigeria launched a partnership with the UK Department of International Development (DFID) across seven states to improve the quality of the public school system. In Lagos, however, there was a growing realization throughout the 00s that many small low fee private schools were appearing across the state. Surveys suggested that actually a majority of children in Lagos were attending private and not public schools. This raised questions about how effective public school reform could be, if half of the children remained in the private sector. In 2011, to settle the question, a complete census of all the schools in Lagos state was carried out. The findings were quite amazing – well over half of schoolchildren in Lagos are indeed attending private schools, of which there are many more than there are public schools. The Lagos-DFID partnership decided that a new programme of reform was needed, both to learn more about to what extent private schools are serving the poor, and to explore what role the state can play in ensuring private schools are delivering good quality education.

With limited funding available for direct financial support of students in the private sector, this new programme decided to adopt an approach trialled in the agricultural and health sectors in Nigeria and other developing countries – “Making Markets Work for the Poor” (M4P). Rather than engaging in direct service delivery, this approach instead analyses how the private market system operates, seeks to identify market failures which can be corrected, and any other improvements which can be made to the overall operation of the system, such that results can be generated sustainably and at scale through the operation of a whole set of independent businesses.

In the education sector, there have been examples of some specific interventions in private school markets in different countries, but none that tied them all together within a strategic overall approach. After much analysis and diagnosis of the problems, four strategies were developed to improve the private school market in Lagos.

1 – Clarifying the rules of the game. Too many schools were in insecure positions due to uncertainty about what minimum standards are, what their responsibilities were, and what rights they had. To address this, a new school grading system has been developed.

2 – Providing better information to parents about education and school quality, to improve competition in the marketplace and drive up demand for better standards.

3 – Equip schools with the resources to respond to these competitive demands by developing the market for financial products.

4 – Stimulate the supply of providers of learning materials, allowing schools to provide a better service.

What are chances of the programme working?  For some perspective we reviewed how the plans compared with a set of 15 similar market systems programmes, from a range of sectors and from both Nigeria and other countries. The planned programme is close to the theoretical ideal for this kind of programme, but it is under pressure to consider the following two issues:

First – will the proposed interventions really improve learning for the poorest? The programme is keen to work with all spectrum of schools within the education market. The risk with such an approach is that it might be possible to have a very successful project that does improve learning outcomes across the sector, but without necessarily improving quality at the very bottom end of the school market catering to the very poor children. Existing evidence suggests that it is possible for these schools to reach the poor but often not the very poor. This assumption will need to be carefully monitored, and ideally the interventions adjusted over time if they are seen to be less relevant for the schools at the bottom end.

Second, the programme is resistant to the idea of considering subsidies, such as voucher schemes to enable very poor households to access better quality schools, or long-term government subsidised school improvement services for schools at the very bottom end of the market that lack the resources to invest in better teaching. Whilst subsidies can be seen to violate the basic principles of a market-led approach, this position misses a critical distinction between economic and social sectors. Social sectors such as education have positive externalities. Individuals are likely to under-invest themselves in education as some of the benefits accrue to society as whole, they accrue a long time in the future, and people are often credit constrained. It is uncontroversial that there is a role for the public sector in financing education – whether government is best to also deliver education or whether there is a role for the private sector is still an open question. In particular, where school vouchers for the poorest children might allow them to move to a better quality school, and good quality publicly subsidized training for teachers and headmasters at low-fee private schools could support schools at the bottom end of the market that would otherwise be unable to afford to invest in improvement.

What is no longer controversial is that private schools in many developing countries are now too numerous to ignore. Controversy lies in the proposed policy solutions – to ignore the private sector and just focus on “fixing the public sector”, or on the other hand to engage with the private sector to see how independent schools can best contribute to the goal of quality education for all. Looking at private schools as a partner in such an efforts should not in itself be problematic; but expecting the very poor to be able to pay for quality education themselves is. The DFID programme in Lagos, and others trialing similar experiments, might find promoting synergies between the state and private schools as a more effective way to provide quality education to the very poor rather to focus exclusively either on the state or the low-fee private schools. What is likely to pay most dividends is the focus on innovation and creative synergy, not a toeing of ideological lines either in favour of the state or the market.

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