This week, world leaders convene in London with the aim to mobilize funds for the Global Partnership for Education to benefit at least 175 million children over the next five years. Reversing the learning losses caused by the COVID-19 pandemic will require substantial, well-targeted public spending. This is particularly true in the context of assisting poor and disadvantaged children who were already at a higher risk of being left behind prior to the pandemic to catch up as quickly as possible.
Strained public finances
However, the pandemic also means that government coffers in developing countries are under enormous pressure as treasuries are having to meet more competing needs with less revenue due to reduced economic activity. The average budget deficit in low-income countries grew by 1.5 percentage points to reach 5.5 percent of GDP in 2020 despite limited fiscal support provided to counter the economic effects of the pandemic. Although this is a modest increase compared to the more substantial spikes in the deficits of advanced countries, increasing borrowing costs and reduced debt servicing capacity make it difficult for low-income countries to finance their deficits.
The emerging fiscal landscape does not bode well for education. Social sector spending is often susceptible to in-year cuts resulting from revenue shortfalls or exogenous shocks. According to the Education Finance Watch 2021, two-thirds of low- and lower-middle income countries have cut their education budget since the onset of the pandemic. Only a third of upper-middle and high-income countries have done the same. Even in countries where education spending has increased, the additional resources might not be sufficient to meet the elevated needs after the pandemic. For example, in Kenya, parents are likely to be required to pay more in school fees this year despite a 3.3 percent increase in the education budget. In cases where cuts have to happen, the reduction in discretionary spending could mean the elimination of any wiggle room for innovation, considering the bulk of education spending is pre-committed in the form of teachers’ salaries. With budgets under stress, public spending efficiency becomes more important than ever.
More transparency for stormy times
One way to increase the efficiency of public resources allocated to education in this fiscal environment is to improve public scrutiny and monitoring through enhanced transparency. The case for budget transparency is stronger now due to the potentially high marginal impact of allocation decisions. Unfortunately, budget documents published by many governments do not provide detailed information to facilitate scrutiny of allocation decisions across major programs. A survey conducted by the International Budget Partnership found that only 10 of 28 surveyed countries present budget information by sub-functions. In the context of education, this means only a third of those 28 governments supply budget data disaggregated into allocations for primary, secondary and tertiary levels. The scene is more concerning when it comes to reporting actual expenditure by sub-functions, with only 4 of the 28 countries publishing disaggregated ex-post budget data.
Citizens’ budgets can be a powerful tool to communicate information about education budgets in a simple and non-technical manner to civil society organizations and media, as well as teachers and parents groups (here is an example of a citizens’ budget from Nigeria). It is encouraging that several African countries are institutionalizing the practice of publishing citizens’ budgets at the central government level. However, for locally delivered services such as education, it is equally important that subnational governments also adopt citizens’ budgets. In a period where the fiscal space is as narrow as it currently is for many countries, reprioritizations and adjustments should be informed by careful considerations of effectiveness and efficiency that are also transparent to citizens and civil society organizations.
In addition to publishing budget documents in hard copy, it is important for global education efforts to make disaggregated budget data accessible in comparable and digital formats. The availability of education spending data from a wide variety of countries is key to benchmarking and monitoring budget performance. Over the past three years, fewer than a fifth of countries reported how much they spend on primary, secondary and tertiary education to UNESCO or the IMF. A reliable cross-country budget dataset also facilitates research and peer-exchange at regional and international levels.
It’s the politics, stupid!
When all is said and done, budget transparency requires strong political incentives for governments to open up about arguably the most powerful instrument they control, the budget. Political incentives for transparency might be tricky to induce in a sector such as education, where interest groups are often fragmented and relatively weak. As such, the policy dialogue towards improving budget transparency in education should inevitably consider strategies to address the political economy constraints of transparency. Fortunately, there is evidence that economic and fiscal crises can jolt governments into instituting more independent budget scrutiny regardless of entrenched political interests. There is a chance to make greater budget transparency a silver lining in the cloud of COVID-19—to the benefit of students who will need support to make up for lost learning.
CGD blog posts reflect the views of the authors, drawing on prior research and experience in their areas of expertise. CGD is a nonpartisan, independent organization and does not take institutional positions.