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This paper looks at how countries have mobilized additional resources for education and assesses their impact on access and learning outcomes, using the World Bank's new Learning-Adjusted Years of Schooling measure. The paper shows that global spending on education has risen significantly over the past two decades, although spending as a share of gross domestic product has remained relatively unchanged, at about 4.5 percent. However, global trends mask large differences across regions and country income groups. For example, low-income countries recorded the largest increases in terms of the share of GDP spent on education, but the absolute amount they devoted to education remained low compared to other countries. Economic growth has been the main driver of increases in public education spending. Yet, countries that achieved the largest and most rapid spending increases did this through a combination of increases in overall government revenues, a greater prioritization of education in the government budget as well as healthy economic growth. Increases in public education spending did not generally result in major improvements in average education outcomes. Using the available data, the paper shows that a doubling of government spending per child led to an increase in learning-adjusted years of schooling of only half a year. Preliminary findings also show that countries with lower efficiency and spending are expected to get the most from increases in spending in improved education outcomes. The paper concludes by outlining an approach that allows countries to assess their potential for increasing education funding and the expected effects on their education outcomes, based on benchmarks drawing from the data of comparable countries. It also underscores the urgent need to improve data on public education spending and education outcomes, to extend this analysis to cover a wider set of countries and increase the robustness of country-level benchmarks. [This paper is a product of the Education Global Practice.]

This paper presents education finance trends for Bangladesh since 2000. It shows that while government spending on education as a proportion of national income has stagnated, it has increased in real terms. Real increases in education spending have resulted in substantial increases in per student spending in basic education. At primary, enrolment declines have reinforced these trends and in 2005 per student spending in government primary schools was 30% higher, in real terms than in 2001. Despite these increases, per student spending on education in Bangladesh remains low compared to other countries in the region and countries at similar levels of development. Levels of government funding also vary enormously across different providers of basic education although these differences do not appear to have a significant impact on education outcomes at the primary level. At secondary, there appears to be a closer correlation between levels of public funding and outcomes although the socio-economic status of student intakes also appears to play an important role. To achieve equitable access to basic education, it is important to narrow these public funding differences. However, given the comparatively low levels of funding across the basic education system it is perhaps more important to increase overall levels of funding if the quality and overall efficiency of the system is to be improved. Data used for public expenditure and budget analysis are appended. (Contains 28 footnotes, 10 tables, and 7 figures.)