Financing

Politics & Bureaucratic Capacity

Essence

The aim of this indicator is to capture key aspects of education financing that play a key role in promoting learning for all. These are adequacy and efficiency. If existing information is available, a sub-indicator on equity will also be reported.

Indicator

A score ranging from 1 to 5 that considers the quality of financing using two lenses – adequacy and efficiency. This score is calculated using 3 sub-indicators: 1) per-child spending (adequacy), 2) public management financing performance (efficiency), and 3) outcomes per spending (efficiency). If an existing data source is available, a fourth sub-indicator on equity will be included. The disaggregated information for each of these 4 sub-indicators is available as a drill-down option.

Background

Many countries have successfully increased their investments in education; just in the last 15 years, government spending on education has doubled. Yet much more is needed to achieve the ambitious learning agenda that countries have signed onto with the SDGs, and countries will also need to invest better. Using resources more efficiently, and targeting it at those who most need it, will require tackling weak links in spending-learning chains—by improving the alignment between spending and learning, reducing inequalities in spending, avoiding spending on the wrong things, and ensuring that the funds reach the schools. Therefore, the indicator proposed measures not just adequacy (how much money is being invested), but also equity and efficiency (how the investment is being distributed and whether it is achieving the expected results).

Existing Data Source

Instrument Used for Measurement

  • Survey of Public Officials
  • Existing Data Source
  • Policy Survey
  • School Survey

Measurement Approach

All four sub-indicators mentioned above will be normalized, so that they can be added to generate a summary score to measure overall health of financing. The methodology for each of the sub-indicators is the following:

  1. To capture adequacy: Calculate per-child spending at the primary-school level using data from the UIS.
  2. To capture efficiency in terms of performance of the financing processes: Use the summary score resulting from the Public Expenditure and Financial Accountability (PEFA) assessment. The score is then weighted to give additional weight to the service delivery pillar of the PEFA assessment.
  3. To capture efficiency in terms of outcomes achieved for the given level of investment (return on education investment): Use stochastic frontier analysis to estimate the expected adjusted learning outcomes (combination of access and learning outcomes) associated with the different levels of per child spending. The sub-indicator reports the distance between the observed outcomes and the expected outcomes.
  4. To capture equity: When data availability allows, an equity sub-indicator will also be reported. This sub-indicator will be based on the comparison of the primary education spending per capita in the bottom quintile of the national income distribution to the national average.  

Instrument Sources

UNESCO Institute of Statistics for spending per child and spending per education level (primary)

Public Expenditure and Financial Accountability (PEFA)