Financing Education / pdf - Unesco

PROGRESS IN FINANCING EDUCATION FOR ALL
Contribution of external aid to EFA since Dakar
The response to the call at Dakar for donors to
coordinate their efforts around sector-wide reforms
and policies has been positive, as the increased
share of education aid demonstrates. However, the
experiences and evaluations of a small number of
donor agencies at the forefront of this movement,
and the country case studies indicate that adoption
of a programmatic approach is not without
difficulties and that several conditions need to be
met for it to be effective. Among these are: (a) a
well-prepared sector or subsector plan to which
the government is committed; (b) the ability of the
education sector to obtain the required backing of
key ministries such as those dealing with finance
and personnel; (c) a solid system of public financial
management that is accountable and transparent;
(d) broad support from multiple stakeholders who
through their own actions can support or hinder
the progress of the plan; (e) an interest and ability
on the part of government enabling it to carefully
monitor change in the sector and to react
appropriately, and, generally; (f) capacity at all
levels of policy-making and service delivery to
ensure that decisions are made and carried
through effectively.
To the extent that these and other necessary
conditions are lacking, direct sectoral or general
budget support will not be effective. 15 The donors,
in turn, whether within or outside a group providing
general financial support to the sector programme,
need to ensure that, in all their dealings with the
government and other donors, the principles of
harmonization and alignment are adhered to and
that their own actions do not distort government
priorities. Finally, even where many of the issues of
harmonization and alignment are being dealt with
formally, the nature of the obstacles surrounding
dialogue between government and donors is not
always sufficiently assessed on both sides.
The impact of aid on basic education
Responding to the Dakar Framework and other
calls to increase aid for the expansion and
development of basic education in developing
countries, donors provided a total of US$21 billion
in ODA for this level between 2000 and 2005. There
is a general expectation that if donors provide the
aid, the coverage and quality of basic education in
receiving countries will improve. This is not
necessarily the case. The receiving government
may reduce its own allocation for education and
direct more funds to sectors not receiving aid, or
it may allocate less of its education budget to basic
education and more to levels that do not receive
aid; aid-assisted expansion of public education may
lead to reduction in private sector enrolments or
in families’ purchases of school materials, so that
neither total enrolment nor overall expenditure
increases; and aid may not be used in the areas
for which it was provided or it may be ineffective.
Assessing the impact of aid on basic education
is part of a wider discussion of the overall impact
of aid on economic and social development. To
this question there is a broad range of answers,
from very little impact to substantial impact. As
R. C. Riddell (2007) notes, ‘most disputes about
the impact of aid can be traced back to two
sources: evidence and methods of assessment’
(p. 165). Both of these are minefields. Nevertheless,
the need for additional aid is a central element of
the Dakar Framework for Action, global advocacy
groups are calling for additional aid for basic
education, and both donors and recipient
governments act as if they accept as a given that
aid is indeed effective. The question of what impact
aid has on basic education and the movement
towards the EFA goals must, therefore, be
addressed.
Quantitative assessments show small
but positive effects
Over the past two decades, many attempts have
been made to assess empirically the impact of aid
on economic development. The methods range
from case studies of a single project to crosscountry
regression analysis of the impact of total
aid flows. Despite their large number and their
variety, these studies are inconclusive. Some find
an unambiguously positive relationship between aid
and economic development (Clemens et al., 2004;
Dalgaard et al., 2004; Hansen and Tarp, 2001;
Roodman, 2004), others find no relationship (Boone,
1996; Easterly, 2001, 2002, 2003, 2006), while a third
set of studies concludes that the effect depends on
the quality of institutions and policies (Burnside and
Dollar, 2000). The emerging picture is that aid can
have a positive impact on development but the link
is very fragile and whether assessments are
positive or negative depends critically on the choice
of data and estimation methods.
Some recent work has focused on sectors,
including education, rather than on economic
development as a whole. Studies by Michaelowa
(2004) and by Michaelowa and Weber (2007b) found
Assessing the
impact of aid
on basic education
is part of a wider
discussion of the
overall impact of
aid on economic
and social
development
15. It is ironic that the
conditions necessary for
successful sectoral or
general budget support exist
more commonly in middle
income countries while these
forms of aid are more
common in low income
countries.
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