Dramatic learning gains for students in Partnership Schools for Liberia (PSL) suggest that the Liberian Ministry of Education is on the right track with its reform program “Getting to Best.” These learning gains, the equivalent of 60% more learning for PSL overall, and more than an additional year of learning for students in schools operated by the most successful providers, have been heavily subsidized by investors and donors. The Government of Liberia’s current investment in schooling, approximately $50 USD per student annually, is clearly insufficient to achieve the bold vision contained in “Getting to Best.” The Ministry of Education has publicly stated its intermediate term goal to double the government’s education investment. Even so, the average per pupil expenditure for operators (excluding Bridge) is slightly more than double this anticipated increase to Liberia’s education budget. Bridge, the PSL partner with the highest overall investment, spent a combined $371 in school one-time start-up and school operating costs. While the second year of the program has just begun, Bridge estimates year two start-up costs for the new 43 public schools and the total operating costs for all 68 public schools will be $226 per student. While that is a 39% reduction in operating costs year over year, that is still greater than the Government’s expected spending. It is clear that the PSL program must close this gap between current expenditures and projected funds availability to ensure its sustainability.
Bridge maintains that it is on target to achieve significant economies of scale and its schools will operate sustainably at the $100-$110 government funding target by 2020. Bridge’s original invitation to partner with the government of Liberia came after the government had studied its programs in Kenya and Uganda and saw improved learning. While fees vary from Early Childhood through Grade 8, parents pay an average of $84 per year. The challenge posed to Bridge was: could it provide similar teacher support and achieve similar outcomes on $50-$60 a year in Liberia? Bridge estimated that when serving the teachers and students at approximately 500 schools, its total program costs would be filled by the government capitation. Already operating hundreds of schools across East Africa, Bridge is familiar with the costs incurred to support such a large network. This $60 target is consistent with its operating costs for schools in Kenya. While the total expenditure for Kenyan schools is estimated at $190 per student today, Bridge expects these costs to be fully covered by parent fees as the number of students increases. These costs also include teacher salaries, benefits, facilities construction and maintenance, and taxes. These additional costs will not be incurred in Liberia, since teachers will remain on the government’s payroll and the buildings are owned by the government. Bridge estimates additional cost savings from lower central office infrastructure and staffing costs, and general transaction costs savings due to the having a single payer (government), rather than multiple payers (parents). Bridge expects advances in technology and economies of scale across the entire organization to solve the remaining gap.
The Ministry of Education, for its part, recognizes the additional $50-$60 as an intermediate goal, and, in so naming this increase, leaves open the possibility for expanded investment in education over time. Already, the PSL program has achieved significant cost savings as it has helped the government identify “ghost teachers” and eliminate these absent teachers from the government payroll. It is also clear that the government expects to operate more efficiently as it learns from the PSL operators more about their management and operational practices.
But it is the long-term productivity benefits to better education that are most promising. The Ministry is well-aware of existing research, such as Eric Hanushek’s
estimates of 2% return to average annual growth rate in Gross Domestic Product for a one standard deviation increase in student test scores. The long-term returns to educational improvement are significant; Hanushek estimates that even a reform plan that takes 20 years to improve by 0.5sd will increase GDP by 5% in 32 years. Should the PSL program show similar improvement over time and as it expands, the economic returns to Liberia would be tremendous.
Sustainability remains an important consideration for the PSL program, but remains within reach, even for the operator with the most significant investments to date, as long as cost savings and economies of scale continue year on year, as they already have from the first year to the second year. The key question is whether donors will continue to fund the gap between now and 2020.
