More Effective Education Aid: The Challenge of Achieving More Evidence-based Aid Allocation

By Birger Fredriksen, Results for Development.

From efficient to effective aid allocation

The post-Dakar Education for All (EFA) decade saw much focus on enhancing aid recipient countries’ ability to develop more evidence-based education policies. Commendable progress has been made, more so than during the post-Jomtien decade. However, less attention has been paid to enhancing the catalytic impact of aid through more evidence-based aid allocation. The “Paris Declaration on Aid Effectiveness” focuses on enhancing technical efficiency of aid delivery and use. This is important but not sufficient to ensure more effective aid if the aid is not allocated strategically to sub-sectors, purposes and countries to maximize its impact. During the present decade, the volume of education aid is unlikely to increase at the rate seen during the past decade, meaning that aid will account for a declining share of recipient countries’ education budgets. Thus, the ability of aid to stimulate progress towards the post-2015 goals will increasingly depend on it being allocated more strategically.

What would more evidence-based education aid look like?

Broadly speaking, aid should (i) provide additional funding for education by adding to and/or helping to mobilize more domestic resources; and (ii) be allocated strategically to maximize the effectiveness of total education spending of which domestic resources constitute almost always by far the largest share. 

Strategic aid allocation would often mean targeting aid on inputs and areas where evidence suggests that additional funding will be particularly effective. Such targeting may not fit well with the often-made assumption that, because money is fungible, targeting – through direct funding or use of agreed-upon performance indicators for budget support – is neither necessary nor desirable. However, the lack of symmetry in the fungibility between aid and domestic funding often makes targeting necessary. This is especially true for countries where practically the whole education budget is used on teacher salaries. In this context, aid can replace domestic funding for most types of expenditures. But domestic funding will not necessarily replace targeted aid to fund investments that are essential, but mostly yield benefits in the medium to long term, or to population groups that have little political clout.

Given the above, and given current education challenges in Sub-Saharan Africa (SSA), which is the focus of this blog, more evidence-based aid allocation would mean giving higher priority to four broad areas:

i)                    “Soft investments” to (a) build institutions for leadership, accountability and innovation; (b) enhance quality by supporting investments proven to be effective; and (c) pilot innovations including cost-effective second-chance programs for those who missed out on basic education.

 ii)                  Provide additional funding for vulnerable groups. Practically no aid was provided last decade for pre-primary education (part of EFA Goal 1), or second-chance programs for those who missed out on basic education (Goals 3 and 4). There is solid evidence to show the multiple benefits of such investments, especially in SSA which lags far behind other regions in building basic human capital foundations. This is an essential development stage that cannot be “leapfrogged”.

 Long-term investments of the above type are unlikely to be prioritized when governments face severe budgetary constraints: Political economy considerations often drive them to prioritize the short term over the long term, and the demands of vocal groups over the basic needs of the voiceless. In such cases, one key role of aid should be to support long-term investments including quality basic education for those who missed out. In addition to promoting equity, this is also sound investment, especially in SSA where coverage of pre-primary education is only 17%, 24% of children are out of primary school, and more than 40% of adult women are illiterate. Lack of vigorous action to rectify this will have severe negative long-term consequences: One-third of the labor force could be illiterate in the 2030s and 2040s, and more than one-third of SSA’s children could be born to illiterate mothers. 

 iii)                Fragile countries: Last decade’s focus on performance-based aid in SSA was driven by low aid effectiveness and education stagnation in the 1980s and 1990s. The last decade saw solid progress; it is now time to give higher priority to less well-performing countries. This will require different aid modalities than for better performing countries, including more risk-taking. 

In addition to the above three country-specific sets of priorities, the international community needs to:

iv)                Revitalize and increase funding for global public good (GPG) institutions. Work conducted by regional and global agencies and networks in support of analytical work, policy development, knowledge-exchange, and technical cooperation are increasingly important GPG functions.  For example, World Bank clients cite knowledge services as the Bank’s most valuable contribution, more than twice as often as financing. Globalization and greater interconnectedness have greatly increased the scope for drawing cross-border externalities from national experiences and technical expertise. But to do this effectively requires capable institutions to identify, synthesize, and disseminate good practice experience and provide high-quality technical support.  Unfortunately, the ability of especially poor countries to benefit from such GPGs is hampered by the chronic underfunding and resulting weak capacity of global technical agencies (especially UNESCO), and the decreasing technical expertise of funding agencies.

What are the constraints on achieving more evidence-based aid allocation?

The allocation of education aid is determined by complex processes within aid recipient as well as donor countries and agencies, each responding to many national and international constituencies as well as global development goals. Moreover, much bilateral aid is determined by historical ties and/or political considerations. And, while aid recipient countries supposedly are “in the driver’s seat”, increasingly tax payers in donor countries are weighing in on how their taxes should be used.  It would be a miracle if the outcome of these processes would yield anything like an “optimal” aid allocation however defined. Thus, there should be no illusion about the complexity of changing the present allocation.

Still, even within these constraints there likely is scope for more evidence-based aid allocation.

First, since the EFA goals were established, considerable more domestic and aid resources have been mobilized for education. While support for Goals 1, 3 and 4 has been modest, most donors give high priority to objectives (e.g., equity, women’s empowerment, poverty reduction) that necessitate progress towards these goals. Aid has been very successful in promoting girls education; why should donors not be equally willing to support second-chance programs for young illiterate women? But to obtain such change in aid allocation would require much stronger concerted effort by the global education aid community not only to advocate for more aid but also for more evidence-based aid allocation.  

Second, the effectiveness of country-specific aid often depends on high-quality technical and knowledge support from regional and global institutions. While such services are also supplied by a variety of private companies and universities, these are very fragmented and complement rather than replace the need for strong global institutions with adequate core funding.  

In summary, there is a need for a concerted, evidence-based global dialogue at a high political level on how to make aid more effective by making its allocation more evidence-based. Why are leading global institutions responsible for education not spearheading such a debate?   

Birger Fredriksen is an expert on the development of education in developing countries. Before retiring, he worked for 20 years in the World Bank including as Director for Human Development for Africa, and 12 years in the OECD and UNESCO. He is currently an expert for Results for Development. Email: birger.j.fredriksen@gmail.com