Service delivery

Non-state providers

The state is no longer seen as the sole provider of basic services such as water, sanitation, education and health. There has been a proliferation of non-state providers (NSPs) in developing countries in recent years.  This is primarily due to the rise of small, often informal, providers who are increasing in numbers, scope, scale and impact to fill the gap left by weak state capacity. The privatisation of some public services, for example in the water sector, or the private management of public services on behalf of government have also contributed. 

There are various types of NSP:

1. market-based, for profit providers, ranging from large private firms to individual practitioners and informal local entrepreneurs
2. non-profit providers, for example NGOs, including faith-based organisations and volunteer groups
3. Groups rooted in alternative political authority, for example revolutionary movements.

Page contents:

• Pro-poor provision
• Quality and regulation
• NSP relations with the state
• Privatisation
• PPPs and contracting

Pro-poor provision

Some experts argue that NSPs can be pro-poor, for example because they often provide access to services in areas that are not covered by state provision. Others argue that they are not pro-poor because they are often expensive, are under no obligation to consider equitable access and sometimes require poor people to make contributions that are not expected of non-poor communities. Research shows that poor people use private providers to a surprising extent, given the associated costs, sometimes choosing them over free state provision. 

Oxfam International, 2009, ‘Blind Optimism: Challenging the myths about private health care in poor countries’, Oxfam Briefing Paper 125, Oxfam International
The realisation of the right to health in poor countries depends upon a massive increase in health services to achieve universal and equitable access. A growing number of international donors are promoting an expansion of private-sector health-care delivery to fulfil this goal. This briefing paper from Oxfam contends that while the private sector can play a role in health care, prioritising this approach is extremely unlikely to deliver health for poor people. Governments and rich country donors must strengthen state capacities to regulate and focus on the rapid expansion of free publicly provided health care, a proven way to save millions of lives worldwide.
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World Bank, 2009, ‘Improving Water Utility Services through Delegated Management: Lessons from the utility and small-scale providers in Kisumu, Kenya’, Field Note, Water and Sanitation Program, World Bank, Washington
How can adequate water and sanitation services be provided in poor urban areas? Partnerships with small-scale providers are increasingly important as utilities struggle to serve a growing population, particularly the poor. This field note from the World Bank's Water and Sanitation Program explores a successful delegated management approach being used in Kisumu, Kenya’s third largest city. The model rests on principles of transparency, clear contractual arrangements and the right financial incentive for all parties.
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Tooley, J., 2005, 'Is Private Education Good for the Poor?', Working paper, University of Newcastle Upon Tyne, UK
Many believe that the private sector has little to offer in terms of reaching the Millennium Development Goal of 'education for all' by 2015. Private education is often assumed to be concerned only with serving the elite or middle classes, not the poor. What is the nature and extent of private education for the poor? This working paper outlines how private schools can play an important role in reaching the poor and satisfying their educational needs.
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NGO provision is also being explored as a legitimate alternative to formal state or private provision, particularly in the education sector:

Rose, P. M., 2007, 'NGO Provision of Basic Education: Alternative or Complementary Service Delivery to Support Access to the Excluded?' Project Report, Consortium for Research on Educational Access, Transitions and Equity (CREATE), Falmer, UK
What role should NGOs take in providing basic education? How effective is NGO provision in facilitating access to education? This paper from the Consortium for Research on Educational Access, Transitions and Equity shows that NGOs increasingly see themselves as providing education services that are complementary rather than parallel to the state system. However, there is very little systematic, critical analysis of who is gaining access to education offered by alternative providers, or what they are actually getting access to. Further analysis of alternative provision of education is therefore needed, including the implications for NGO-government coordination.
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Quality and regulation

Some researchers argue that NSPs are more responsive than state providers and are more able to be innovative and inclusive. Often, small scale providers are able to reach underserved areas and give poor people access to vital services that they would otherwise be denied. Other researchers argue that despite these positive aspects, NSPs are under-regulated and often provide poor quality services. Weak state capacity, lack of information and a poor dialogue between the state and NSPs makes regulation difficult.  Whilst users are reliant on NSPs to fill the gaps left by public provision, governments are often wary of endorsing them due to concerns over quality and accessibility. 

Moran, D., 2006, ‘Comparing Services: A Survey of Leading Issues in the Sectoral Literatures’, Public Administration and Development, vol. 26, issue 3, p 197-206 
What does the literature say about the interaction between state and non-state provision of basic services? What does it tell us about government capacity to regulate, facilitate and contract non-state providers (NSPs)? This article from the journal Public Administration and Development reviews recent research into government interventions in non-state provision of education, health, water and sanitation, and identifies gaps in the literature.
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NSP relations with the state

Until recently, little research has explored the relationship between the state and NSPs. Relations are generally marked with deep scepticism and a weak policy dialogue. Several authors suggest that the government must move from reluctance to engage with NSPs and repressive forms of regulation, to creating an enabling environment for NSPs. This includes promoting creative, alternative forms of regulation, improving dialogue and providing practical support.

Batley R. and Mcloughlin C., 2009, 'State Capacity and Non-state Service Provision in Fragile and Conflict-affected States', GSDRC issues paper, Governance and Social Development Resource Centre, Birmingham
How can governments effectively engage with non-state providers (NSPs) of basic services where capacity is weak? This paper examines whether and how fragile and conflict affected states can co-ordinate, finance, and set and apply standards for the provision of basic services by NSPs. It explores ways of incrementally engaging the state, beginning with activities that are least likely to do harm to non-state provision.
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Larbi, G., 2006, ‘Opportunities and Challenges in Enabling Non-State Providers of Basic Services: Case Studies and Lessons from Nigeria’, paper prepared for the workshop ‘The Politics of Service Delivery in Democracies: better access for the poor’, 27-8th April, Stockholm
What is the role of non-state providers (NSPs) in service delivery, especially in relation to the poor? What is the policy environment in which NSPs operate and to what extent do governments support and engage with them? This paper from the University of Birmingham’s International Development Department presents findings from a study of small-scale water, health and education NSPs in Nigeria.
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Privatisation

There are different levels of privatised service provision including public private partnerships and total private ownership. Private service provision in developing countries has been hindered by weak regulation and low investment. Privatisation has also been criticised for reducing accountability and equity for the poor.

Bayliss, K., and Kessler, T., 2006, 'Can Privatisation and Commercialisation of Public Services help Achieve the MDGs?', Working Paper 22, United Nations Development Programme, International Poverty Centre, Brasilia 
Basic services are essential to reducing poverty and improving quality of life. Should these services be provided by the state, or the private sector? This paper, based on a UNDP project on privatisation and poverty reduction, examines the impact of market-oriented reform policies on the delivery of basic services in developing countries. It argues that reliance on private sector provision will not address the central challenges of public sector delivery. Market-led policies also fail to contribute to the MDGs and often reduce the likelihood of achieving them. The debate over public service reform must be focused on poverty reduction, and the state has to assume central responsibility for the provision of essential public services.
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PPP’s and contracting

Public Private Partnerships (PPP’s) are a system where government services are funded and operated through a partnership between government and a private company or citizen based organisation. PPP’s are used extensively in developed countries which has led to their increased use in developing contexts.  Contracting is a type of PPP. With careful design and management, contracting can bring benefits to the state including increased efficiency and the transfer of risks and costs to the private sector. 

Pérez-Ludeña, M., 2009, ‘Towards a New Model of PPPs: Can Public Private Partnerships Deliver Basic Services to the Poor?’, UNESCAP Working Paper, United Nations Economic and Social Commission for Asia and the Pacific
This paper from the United Nations Economic and Social Commission for Asia and the Pacific examines the difficulties of reaching the poor through Public Private Partnerships (PPPs). Case studies show that 'pro-poor PPPs' are possible; they need to incorporate some of the strategies and methods of the informal sector, and include civil society organisations among their partners. Governments should adapt regulations to accommodate these arrangements and encourage the participation of private companies, NGOs and community organisations.
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Fall, M. et al, 2009, ‘Reforming Urban Water Utilities in Western and Central Africa: Experiences with Public-Private Partnerships: Impact and Lessons Learned’, Water Sector Board Discussion Paper Series, Number 13, World Bank, Washington
What has been the impact of public-private partnerships (PPPs) on urban water quality and access in Central and Western Africa? This report from the World Bank examines fifteen countries throughout the region, analysing different models and drawing out lessons learned. It concludes that public-private partnerships have had a positive impact on access, reliability, and cost of water in Central and Western Africa and can provide useful examples for the implementation of such arrangements elsewhere.
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Patrinos, H.A., Barrera-Osorio, F. and Guáqueta, J., 2009, ‘The Role and Impact of Public-Private Partnerships in Education’, Education Section, Human Development Department, World Bank, Washington
How effective are public-private partnerships (PPPs) at improving education in the developing world? This book, published by the World Bank, argues that PPPs can increase equity in education systems and improve education quality. In addition, such arrangements can make service delivery effective and expand possibilities for financing the education sector. Although few rigorous studies have been undertaken, early indications from the recent private education boom indicate that heightened efficiency, more choice and wider access result. Overall, better test scores seem to come from privately-operated institutions, even if they are publicly financed, and private management appears to be more efficient.
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