Publication Date



Paper presented at UQSE 2007: International Conference on Universal Quality School Education Challenge of the 21st Century 21–23 November 2007, New Delhi


The case for public expenditure on education is based on its contribution to the good of society over and above the benefits received by the individual educated. These benefits can be economic, the benefits of a larger pool of educated labour that allow for rapid economic development, and social, including the benefits of more committed law abiding citizens and the relief of poverty. Governments around the world have committed themselves to achieving the goals of Education for All (EFA). However, for many countries this is a major challenge. EFA will require substantial improvements in school enrolment rates, school completion rates, gender parity, and learning outcomes for all students. These improvements will be difficult to achieve when key educational resources—teachers, support staff, buildings, equipment, textbooks—are already scarce and under intense pressure from population growth and increased school participation rates. How can countries better organise and plan their educational systems to give EFA a chance of being achieved? Economic analysis can help education and policy makers who are facing difficult decisions by analysing the benefits and costs of using scarce educational resources under competing alternatives. Key questions are how much should governments spend on education, who and what should their spending be directed to, and how can they ensure that their spending is effective. Data from the World Education Indicators (WEI) and the various OECD indicators show that there is considerable variation on these matters1. Some of the issues are considered in this paper: 1. The level of public expenditure on education and its distribution in relation to need 2. Where expenditure can yield most benefits 3. The incentives and system level organisation and guidelines to ensure that expenditures are used effectively