10/31/2024 | Press release | Distributed by Public on 10/31/2024 10:36
Countries worldwide are grappling with a significant learning crisis as millions of children lag in fundamental literacy and numeracy skills. Moreover, the evolving demands of employers require that young people be equipped with adequate skills to compete in the modern workforce.
Yet, limited budgets and rising debt hinder government investment in education. Public investment and Official Development Assistance (ODA) in education are losing momentum. During the last decade, total education spending by governments, households, and donors globally has increased, but this has not led to significant increases in allocations per child, especially in poorer countries with growing populations. Further, the escalating global debt is likely to limit countries' ability to augment their investments in education. The situation has become particularly worrisome for low-income countries (LICs) and low- and middle-income countries (LMICs), some of which are allocating nearly the same per capita resources to debt servicing as they do to education.
In LICs and LMICs financial resources for education are limited and often used inefficiently:
Financing education directly contributes to economic growth and social development, yielding substantial returns on investment. Research shows that for every additional year of schooling, individuals can expect significantly higher incomes, enhancing their quality of life and boosting national productivity. By prioritizing education financing, governments can foster a higher-skilled workforce, reduce inequality, and stimulate sustainable development, ultimately benefiting society as a whole.
To achieve this promise, education financing must be:
A key priority of the World Bank's work on education finance is assisting countries to make better use of their investments in education. Through project financing, analytical, and advisory work, we help countries align their available resources with national development and education goals, shed light on the sources of inefficiency, and strengthen their public financial management systems to plan, budget, and use resources more efficiently.
The Education Finance Watch is a collaborative effort between the World Bank, the Global Education Monitoring (GEM) Report, and the UNESCO Institute for Statistics (UIS). The report summarizes available information on patterns and trends in education financing around the world.
The World Bank's forthcoming Global Report on Education Finance, expected in FY26, aims to contribute to in-depth insights on education finance globally, introduce viable - and innovative - additions to traditional public financing, and shape the global dialogue on sustainable education funding across all levels. The report will seek to answer three main overarching questions:
Public expenditure reviews are one of the World Bank's core diagnostic tools for informing various stakeholders about the state of education financing in a country. Such reviews assess the efficiency, effectiveness, and equity of expenditures on education and their adequacy and sustainability relative to the country's educational goals. Guidelines for public expenditure reviews in education set content and quality standards, using technical notes and examples to help users meet these standards.
The FinEd Tool is designed to assist country teams in identifying key challenges and reform opportunities associated with financial management in the education sector in client countries. The Tool uses a problem-driven approach to identify and analyze public financial management (PFM) bottlenecks that undermine service delivery and education outcomes, from both a bottom-up and top-down perspective. The methodology seeks to establish the links between school financing arrangements, PFM systems and practices, and service delivery outcomes.
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