Motivations and effects of the private contributions on public schools

Resumen

This Thesis focuses on the analysis of contributions to education, by private companies. Specifically, it centers on the motivations that originate them, and their effects on the educational performance of students who attend public schools in Colombia. This case study is of special interest, since it represents emerging economy contexts where households make great private-spending efforts on education to compensate low-level public expenditure per student, and yet, despite this, fail to break the persistent gaps in educational access and quality, and great income inequality. Supplementary and consistently with other high social-inequality contexts, private companies have a greater propensity to contribute to the provision of this public good. Indeed, the optimal allocation of both public and private resources is important, in order to raise their impacts and their social returns. The Thesis is structured in six chapters. The first chapter, Introduction, presents the motivation, guide and justification of the Thesis and the methodological option followed, based on the literature gap. The second chapter, Private Contributions, Motivations and Effects. Systematic Literature Review, presents a rigorous and systematic review of the theoretical and empirical literature addressing private company contributions to education, with special reference to the literature of Public Goods, Giving Economics and CSR. The main contributions of the Chapter are a theoretical construct proposal for the concept of ‘private contribution’ and a taxonomy of motivations and effects. This Chapter summarizes types of private contributions, their decision levels, probusiness and prosocial motivations, private and public effects, types of educational institutions and interventions used in the literature. The third chapter, Private Contributions in Education in Practice. Reviewing the Concept with Private Sector Leaders from Colombia, conducting interviews with leaders of companies and organizations of the private sector–the companies of which make contributions to educational institutions–, inquires about the motivation behind their companies making this type of contributions and the effects they expect for the company and for society. Specifically, the categories of Thematic Analysis are validated with those in the literature review in Chapter 2. Among the findings, the following stand out: the shift from altruistic to strategic motivations, the relationship between companies’ targeting criteria and their type of economic activity, and the presumption of positive effects by business leaders, even when they have not estimated the impact of their interventions. Based on the above, a methodologically useful scheme is proposed, which validates and enriches the concept of private contribution and its effects. The fourth chapter, Private Contribution Effect on Public Schools and Academic Performance of Students. Order-m Estimation, contains an empirical exercise to estimate the effect of such contributions under an efficiency approach. Specifically, a Private Contribution Effect (PCE) is calculated on the academic performance of public-school students in the departments of Cundinamarca (including Bogotá DC), Antioquia, Valle and Atlántico, which concentrate 59% of the economic activity of the country, 45% of the enrollment and 56% of the schools that have received help from private companies. Estimation is attained integrating non-parametric frontier techniques in efficiency analysis (order-m) with a meta-frontier framework and using a database of 269,117 records of students in 1,224 public schools, 725 of which received some type of private contributions in 2015 or 2016. The main result is a positive effect in 7 of the 16 study subsamples, which does not consistently support the presumption of positive effects declared by business leaders in the previous chapter. Also, this techniques integration is a contribution of this Chapter to the empirical literature on efficiency in education and its empirical estimation through an aggregate measure of differentiated contributions. The fifth chapter, Which Private Contribution has a greater PCE? Typology of Contributions and Their Effects, broadens the analysis of the effects of contributions by asking what type of contribution has the greatest effect. Specifically, the intent is to validate the robustness of the PCEs vis-à-vis the different types of private contributions that have previously been classified in accordance with the literature reviewed. Their PCEs are estimated and compared by applying a non-parametric Wilcoxon-Mann-Whitney Rank Sum test for independent samples. The main contribution of this Chapter is a methodology for the comparison of contribution types, which involves a better understanding of contribution effects and it represents a guide for the allocation of resources to achieve a greater effect. The following results are highlighted: the greatest PCEs are associated with Access initiatives in the subregions (without capital cities), and Academic type in the capital cities with weak evidence. Contrary to expectations, the types of initiatives with the greatest PCEs are those with the lowest beneficiary coverage. The allocative efficiency and the effects of private contributions–that business leaders presume as positive–have a potential for improvement. Finally, the sixth Chapter presents the conclusions and summarizes the main contributions of the Thesis, as well as the limitations and recommendations for future research. Keywords: private contribution; private provision of public goods; corporate philanthropy; shared value; firm behavior; education and development; public schools JEL Codes: D22, D64, H44, I25, L21, M14.