Low-cost private education in developing countries

In the West and, based on the authors background, especially in Germany private education is seen as something for rich people, who can afford sending their children to expensive private schools. Following this preconceived idea, the standard assumption is, that the notion of private education being exclusively for rich people should be especially true for developing countries.

Surprisingly, there is a boom of private education in the poorest parts of the world. The World Bank says that 20% of primary-school children in developing countries are served by private schools, which is a doubling of the number from twenty years ago. But since most private schools are unregistered and unrecognised by the government, this figure is very likely to be an underestimation, which makes this development even more impressive. In an extensive effort to collect real data on the ground, a team of researchers found that in the slums of the Indian city of Hyderabad at least 60% of pupils are enrolled in private schools. Similar results can be found in Africa, for example in the poor areas of Lagos in Nigeria, where 75% of children are enrolled in private schools.

In many developing countries this boom happens despite free public education being available. The puzzling question therefore is, why do so many poor parents decide to avoid public education and prefer to pay money in order to send their children to a private school?

These private schools are mostly not even recognised by the government and often not very favourably viewed by officials, NGO’s and development institutions. They argue that private schools can only offer inferior facilities. The buildings are mostly directly located in the slums and can from the outside often not be distinguished from residential buildings, because they were simply converted for schooling purposes.

Secondly, the teachers are often not professionally trained and receive much lower wages. In the slums of Delhi for example, private school teachers earn about 40% of the wages public school teachers are paid per pupil. One aspect here is that teachers in private schools do not belong to teacher unions, which in many developing countries are infamous for their political influence especially with regard to wages, working conditions and education reforms.

Considering the previous points, it is not surprising that consequently there is the widely held notion, that these private schools neither provide good quality education nor produce adequate results and are therefore not beneficial for the children. Since these private schools usually do not receive aid or subsidies, they are charging fees, normally on a monthly basis. These fees are mostly in the area of 1.5 to 2 US Dollars per pupil. So another main point, why these schools are so heavily criticised, is that they are for-profit. Making profit in the educational sector is seen as something bad. The UN Special Rapporteur on the right to education, Kishore Singh, said in a speech to the General Assembly on October 27th 2014, that “education must be protected from the forces of privatization” and “for-profit education should not be allowed in order to safeguard the noble cause of education”.

Despite all these criticisms the fact remains, that parents somehow disregard these statements and make an active decision against the opinions of experts. There have to be some good reasons, why many parents opt not to send their children to a public school and instead choose to pay for private education.

A very interesting study, that was published in 2010 about the quality of private schools in the slums of Hyderabad, provides strong indications that the opposite of the ideas mentioned above is true. Children in private schools do significantly better in Mathematics and English than children in public schools and perform equally well in Urdu, the local language. Although the facilities might not be very good, the children going to these schools are mostly from the neighbourhood and since the schools are located directly in the slums, the environment is not something the children are not used to. Additionally, the aforementioned study found that sanitation facilities were provided in 97% of private schools in contrast to only 52% of government schools.

The most important factor behind all this is the fact, that these schools operate for-profit. This creates accountability on many levels. If these schools don’t deliver, parents can simply take their children out and the schools lose paying customers. Moreover, if a teacher is absent or does not perform well, the school can just fire them, in contrast to teachers employed in a public school, who may be a member of a strong teacher union. Furthermore, now that the parents have „skin in the game“ these mechanisms are reinforced so that parents take an even greater interest in how their children are educated.

Therefore, it is not surprising to see in the empirical data, that through these hugely important feedback loops, these schools are able to achieve better results compared to government-run schools. Another positive side-effect, besides creating accountability for teachers, is that there is little chance of international aid money being embezzled or misdirected by corrupt governments, because these private schools, that are often unrecognised by the government, do not receive any of it. It further underlines the cost-effectiveness under which they operate and even manage to achieve better results than public schools.

This bottom-up development in education in developing countries is facing challenges from many experts and government officials, who either operate on noble but misguided ideas about education or simply fear the loss of influence and ultimately probably also aid money. Nevertheless, there are encouraging signs that philanthropists and even some governments are adapting their views to reality and start embracing this development instead of working against it. The British Department for International Development for example is financing vouchers in Pakistan to enable more children to go to these low cost private schools.

So overall it seems that there is evidence explaining the decisions and the reasoning of parents in developing countries concerning their children’s education and moreover, there are signs that opinions are slowly changing, which should be good news for many children in the developing world. It is very encouraging to see that private initiative and concerned parents in developing countries are stepping in, providing an alternative for educating future generations, where governments are utterly failing to deliver.


Tooley , P. Dixon , Y. Shamsan, I. Schagen (2010), “The relative quality and cost-effectiveness of private and public schools for low-income families: a case study in a developing country”, School Effectiveness and School Improvement 21 (2), pp. 117-144

Dixon (2012), “Why the Denial? Low-Cost Private Schools in Developing Countries and Their Contributions to Education”, Econ Journal Watch 9 (3), pp. 186-209

Or for more casual reading: The Economist, August 1st 2015, “Learning unleashed”

4 thoughts on “Low-cost private education in developing countries

  1. Private education is mostly for people who can afford it or have the opportunity to get a scholarship to study there, and in Nigeria, private education is almost equivalent to the fees paid in the US or UK universities, the poor households are automatically excluded from it and has no choice but to attend the government institutions in Lagos Nigeria, the government of Lagos made a move to make sure all schools in the state are registered under the Ministry of Education and the State Universal Basic Education Board, so your estimate of 75% may not be correct, I was part of the public-private partnership team that carried out this task.
    However, in my opinion, most poor people actually do not have the incentives to send their children to school, and the ones that do often send them to public schools which are financed by the government, for example, in Nigeria, which you mentioned as an example in the second paragraph a very high percentage of parents send their children to public/ missionary schools during the primary and secondary stage and many of them would want to send their children to public schools because of the low cost, but the high bureaucracy for entrance and the use of wasta to gain admission, often makes these parents send their children to private schools which range from 10000$ and above, but I will say categorically, that no parents in Nigeria, would send their children to private schools if they earn below 10,000$ a year, the private universities in Nigeria have world class facilities and well-trained professors to teach the students and they often provide good and better education than the government schools.


    1. Thanks for your comment. First of all the estimate is not mine, since we are obviously a little constrained in terms of time and resources to conduct our own research on the ground in this module. Nevertheless I followed up on the source of this number. It comes from the paper “Private and public schooling in low-income areas of Lagos State, Nigeria: A census and comparative survey” by James Tooley, Pauline Dixon & Olanrewaju Olaniyan and was collected by researchers on the ground going through three randomly selected “local government areas” classified as poor in Lagos state with the permission of government officials. To me this method seems to be quite thorough. However, the paper is from 2005, so the only explanation for the discrepancy between your statment and the research, that I can imagine, is a change in government policy over time. I encourage you to take a look at the paper and maybe help clarify the issue.
      Regarding your second point, that poor parents do not have an incentive to send their kids to schools, I am afraid that I couldn’t really follow your line of thought there. Keep in mind that I am not talking about expensive first-class private schools, which they obviously cannot afford, but about low-cost private schools in the poorest parts of developing countries, charging around 2 USD a month.


  2. I assume that kids of wealthy parents attend those schools. Private schools are always observed as more prestigious than public ones. As a result in the future it might help these kids to be better off and get a desired higher degree and a position on a labour market in a long-term prospective. However, as it was said, not all private schools are recognized by the government, it may mean that they are not allowed to hold any final exams and give out any certificates. When one is applying for university, for instance, he needs formal documents from school to proceed further the application process. My point is that if a child gets a private low cost education from a not recognized school his chances to arrange life are lower than chances of a public school graduate. (Even though they are better in Mathematics and English)
    So is this education really profitable?


  3. This is an interesting topic. I have a question concerning the introductory part: I wonder why rich people in Germany send their kids to private schools since the quality of education is just as good in public schools.

    Admittedly, in many developing countries, the quality of education in public schools is hughly unsatisfactory. So if we regard education as an investment, maybe the high-cost private schools will render higher returns, and sending kids to schools that are barely affordable may be a rational choice. However, the distortion of education cost must be removed.

    Do you have any policy recommendations for the developing countries?


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