Revitalizing Sri Lanka’s Tertiary Education – The Need to Involve the Private Sector


By Nisha Arunatilake, Research Fellow – IPS

In a bid to improve the quality of India’s higher education sector and to cater to a growing demand for skilled workers (consequent to  the rapid economic development), in late March 2010, Prime Minister Manmohan Singh’s Cabinet paved the way for the establishment of outpost foreign colleges in India.  Many foreign universities already have links with Indian higher education institutions, but the idea is to promote independent foreign universities in India.  Sri Lanka too has grappled with the question of improving private participation in tertiary education for a long time.  Past attempts at establishing private universities in the country have met with stiff resistance.  One example of such an attempt is the North Colombo Private Medical College, which had to be taken over by the government due to political pressure.  In recent weeks, the debate on private sector involvement in tertiary education in Sri Lanka has been rekindled. This article examines some of the salient issues.


Sri Lanka needs to grow its talent pool

The main argument against private provision of education is that it creates disparities between the rich and the poor.  Although in theory, publicly provided education is more equitable, in practice, literature shows that the privileged classes benefit more from subsidies on education.  Table 1 highlights net enrolment rates in major education cycles by class.  As is seen, net enrolment rates for poorer households’ declines sharply at higher education cycles.  Only, 11% in the poorest economic group enroll in collegiate level (grades 12-13) education; while close to 28% of those in the richest economic group enroll in collegiate level education.

Although not directly revealed, there is a fear amongst those attending public institutions that the competition for limited employment opportunities would increase with the expansion of the tertiary education sector.  But in truth, the country is not producing enough good quality graduates in the education streams in demand.  While on one hand the government in the recent past had to absorb thousands of unemployment graduates, on the other hand there are skilled labour shortages in some growing sectors of the economy. For example, a recent study by the Sri Lanka Information and Communication Technology Association (SLICTA) shows that the demand for information technology (IT) graduates in 2007 was 5,755, but the supply of these graduates in the same year was only 2,216.

Government provision of education – valuable, but slow to adapt

There are, however, many arguments for encouraging public investments in education, the main one been the social benefits of education.  Good quality education improves employability, builds personalities, enhances productivity and improves social and economic welfare through higher earnings.  Education can be considered as a merit good as it provides a useful avenue for alleviating poverty, improving economic and social wellbeing and equity. Lastly, countries invest in higher education because a continual workforce competent in skills needed for the current market is an essential requirement for the sustained development of a country, particularly in the changing international environment.

However, public education systems are often unable to deal with rapid and differentiated demands adequately for various reasons, including lack of information, lack of capacity to identify and initiate change, and lack of resources.  Although there have been recent attempts to modernize the public education system and improve the management of resources in the public education system, the change has been slow.  As is the case in India, some countries have changed their legislation to allow the private sector to come into cater to these different markets.

Private participation in education – the arguments

There are several arguments for private participation in education.  First, private participation in education can provide avenues for mobilizing funds for education development.  Some countries allow private participation to make up for the lack of government funds for education development.  Second, private participation in education is promoted by some countries to allow for education innovation. They feel that highly nstitutionalized public education systems are slow to identify new education challenges and come-up with solutions.  Third, alternate providers of education foster competition, which can result in better performance and more choice for the customers.  Fourth, the private management can improve efficiency and effectiveness as they are autonomous entities that are more accountable to parents and students.  They produce education services in a more cost-efficient manner and are effective than their public sector counterparts.  Lastly, allowing private participation in education can positively influence the performance of public institutions through competition.

Private provision of education can also be disadvantageous for several reasons.  Some argue that privately provided education is inequitable as private providers mainly cater to the affluent classes.  This argument is refuted by others who show that there are private education providers catering to all segments of the market and as such the idea of private education being elitist is unfounded.  Another concern is regarding the quality of education.  The goals of private education institutions may sometimes differ from the national education goals, the extent of this variance will depend on the level of autonomy given to private institutions.  


Private and public involvement – striking a suitable balance

There is also no conclusive evidence that one type of education provision (i.e., “private” vs “public”) is better.  What is clear in the literature is that different types and combinations of public and private education providers can be effective in providing good quality education in different environments.  The structure of the education system and the legal and institutional environments under which different providers operate largely determine the success of different types of education providers.


Table 2: Choice and Contracting Mechanisms in the Education Sector

There are several ways in which the private sector can be allowed to participate in the education system.  These range from pure private models to models where the public and private sectors jointly provide education services (Table 2).  The type of model that is suitable for a particular education market will depend on the characteristics of the community served by the education provider.  Along with allowing private participation in providing education, there is a need for regulation and effective monitoring and evaluation, in order to safeguard the interest of the children. The public education system has the responsibility to ensure that all children receive education opportunities.  Government must ensure that education opportunities are available for children from poor socio-economic backgrounds by providing either public education opportunities, or by providing financial assistance to deserving students to attend a school of their choice.