International governmental investments and low-fee for-profit institutions: A case study

• In Event: Understanding commercial low-fee private schools: looking at available data on Bridge International Academies’ operations in three countries

Proposal

This research seeks to understand whether the International Finance Corporation’s (IFC) support of for-profit, fee-charging private schools, including Bridge International Academies (BIA) targets, reaches, and benefits the poor, as both the IFC and BIA suggest. The IFC is the private sector lending arm of the World Bank Group. Its business model is based on risk management, a position of neutrality and trust, and especially investing in projects the lack or do not have access to the necessary capital (Mundy & Menashy, 2014). Although education is a relatively new investment avenue for the IFC, the corporation recognizes itself as the largest multilateral investor in private education in the developing world (IFC, 2014; Mundy & Menashy, 2012). As part of the World Bank, the IFC simultaneously hopes to expand primary schooling to low income populations and support profitable entities in the private education sector. The Summary of Project Information (SPI) for Bridge International Academies (Project 32171), an IFC project in Kenya approved in 2013, states that the company “aims to provide quality education to children from families earning less than $2 per person per day,” placing the project in the low income target group category.

This research is particularly significant because it analyzes whether IFC investments in K-12 education, including BIA, target, reach, and benefit the poor. Our findings provide insights for donors, financial institutions, companies, and governments about the roles and limitations of for-profit primary and secondary schools in addressing the root causes of poverty and education inequity. We analyzed data through a portfolio review of IFC K-12 investments and field visits to South Africa, Uganda, and Kenya. This presentation focuses on findings from interviews with 16 experts and 30 community members conducted in Kenya. Interviews were semi-structured to reflected the three primary research questions about targeting, reaching, and benefiting the poor and lasted roughly one hour. We found that although BIA targets the poor with support from the IFC, they are not required by donors to reach or benefit the poor and little evidence exists of the latter. Most importantly, several interviewees across various stakeholder types in Kenya raised significant concerns as to how Bridge International Academies, a multinational school company supported by the IFC and other global investors, was operating schools without being registered and without an approved curriculum. Given our findings, we developed recommendations for further exploration of IFC investments related to education and especially focusing on how such investments like BIA coordinate with national governments and can more effectively reach and benefit the poor.

References
IFC. (2013). Bridge International Academies: Summary of Proposed Investment. Retrieved from http://ifcextapps.ifc.org/ifcext/spiwebsite1.nsf/DocsByUNIDForPrint/2354398B8630C4D085257C140067863F?opendocument

IFC. (2014). Big Challenges, Big Solutions. IFC Annual Report 2014. Washington, D.C.: International Finance Corporation.

Mundy, K., & Menashy, F. (2012). The role of the International Finance Corporation in the
promotion of public private partnerships for educational development. In S. Robertson, K. Mundy, A. Verger & F. Menashy (Eds.), Public Private Partnerships in Education: New Actors and Modes of Governance in a Globalizing World (pp. 81-103). London: Edward Elgar.

Mundy, K. & Menashy, F. (2014). Investing in private education for poverty alleviation: The
case of the World Bank’s International Finance Corporation. International Journal of Educational Development, 35, 16-24.

Authors

• Allyson Krupar, Penn State University / Results Educational Fund

• Milagros Lechleiter, RESULTS Educational Fund

• Tony Baker, RESULTS Educational Fund