people and planet

6
over 1996–2010 associated very low literacy levels with
reduced tax revenue (Mutascu and Danuletiu, 2013).
Nevertheless, the effect has been found to be stronger in
some regions, such as Latin America, than in others, such
as Asia (Profeta and Scabrosetti, 2010).
Some countries have used taxpayer education
programmes to improve compliance and instil a culture of
paying taxes, thus increasing revenue and strengthening
the compact between citizens and government, while
others have incorporated tax education in their school
curriculum. In Latin America, nine countries have included
tax education in their curricula and developed materials
jointly between education ministries and tax authorities.
The government of Jamaica extended the Schools Tax
Education Programme down to primary schools. Studies
indicate that influencing tax culture requires education
from an early age (OECD, 2015a).
Channelling more resources towards education spending
Collecting more revenue is an important starting point
for ensuring that education receives adequate funding.
But there is also scope in many countries to reallocate
expenditure for the benefit of education.
Countries at similar levels of economic development have
had very different trajectories in terms of prioritizing
education. Among low income countries, Ethiopia almost
doubled the share of its budget allocated to education,
from 15% in 2000 to 27% in 2013, while Guinea, from the
same starting point, slightly reduced its commitment to
education. Among lower middle income countries in 2014,
Kyrgyzstan and the Lao People’s Democratic Republic
reached the recommended minimum benchmark of 15%,
while Pakistan only allocated 11.3% (Figure 6.2).
Two ways to prioritize spending for education are to remove
fossil fuel subsidies and to earmark education funds.
Redirecting fossil fuel subsidies can boost education spending.
A major source of potential revenue for education is
the reform of fossil fuel subsidy regimes, which keep
prices for certain energy goods lower than market prices
(IMF, 2013b). Fossil fuel subsidies are well documented
to be inefficient and inequitable because mostly richer
families benefit while funds that could be used for propoor
expenditure are limited (Anand et al., 2013; Arze del
Granado et al., 2012; Clements et al., 2013).
The most recent International Monetary Fund (IMF)
analysis suggests that global energy subsidies could
reach $US5.3 trillion in 2015, or 6.5% of global GDP
(Coady et al., 2015). This estimate incorporates the high
environmental and health costs of fuel consumption to
calculate other subsidies implicit in existing fuel prices.
Redirecting explicit and implicit fuel subsidies would be
a useful way to fund the SDGs (Merrill and Chung, 2014),
including education (Steer and Smith, 2015). In Indonesia,
public expenditure on education increased by over 60%
between 2005 and 2009, largely due to fuel subsidy
reform (Tobias et al., 2014).
Governments have earmarked funds to increase education
expenditure. Some governments have earmarked taxes
for education expenditure. Knowledge that a tax will be
used for social purposes can reduce resistance to paying
it. Taxpayers may also like the accountability they believe
earmarking provides regarding how their tax money is
spent (Prichard, 2010). Earmarked taxes have been used
to support primary and secondary education in Brazil
and India, and tertiary education in Ghana and Nigeria
(Action Aid, 2016).
Some fear that earmarking may dissuade other sources
of funding and leave total revenue unchanged, lead to
misallocation of resources within a sector and between
FIGURE 6.2:
Increased allocation to education spending can happen at
every level of economic development
Education as a share of total government expenditure, selected
countries, 2000 and 2014 or most recent year
Education as a share of total
government expenditure (%)
30
25
20
15
10
5
0
Guinea
Burundi
Low income
countries
Source: UIS database.
Ethiopia
Kyrgyzstan
Pakistan
Lao PDR
Poorer lower middle
income countries
Rep. Moldova
Indonesia
2014
2000
Guyana
Richer lower middle
income countries
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CHAPTER 6 | PARTNERSHIPS: ENABLING CONDITIONS TO ACHIEVE SDG 4 AND THE OTHER SDGS