As the Center for Universal Education (CUE) at Brookings reflects on over 15 years of research focused on costing and financing in the global education and early childhood sector, it is essential to evaluate ongoing initiatives aimed at building knowledge and capacity among stakeholders. This review highlights the importance of addressing financing challenges and maximizing the impact of educational investments, especially in light of the COVID-19 pandemic’s profound effects on learning outcomes.
The Importance of Costing and Financing in Education
The need for effective costing and financing in education has never been more critical. Millions of young children and youth risk falling short of their potential, with the pandemic exacerbating an existing crisis. Prior to COVID-19, over 50% of students in low- and middle-income countries faced learning poverty, a number that has now surged to an estimated 70%. Alarmingly, 37% of children poised to enter primary school—over 300 million globally—are projected not to reach basic reading goals by 2030 unless immediate action is taken. This learning crisis threatens to result in over $17 trillion in lost lifetime earnings, equivalent to 14% of today’s global GDP.
Despite these challenges, global education spending has stagnated. In 2022, funding in low- and middle-income countries (LICs and LMICs) was below 2019 levels, with a mere 1.4% of education aid directed to pre-primary education. The stagnation of direct aid and a decline in bilateral support further complicate efforts to address the pressing needs of young learners.
To confront this crisis, there is a pressing need for more equitable, efficient, and effective financing in education. This requires enhanced availability, transparency, and use of costing and financing data at both macro and micro levels. The historical lack of cost data has hindered efforts by governments, funders, and implementers to secure additional funding and improve the quality of educational and early childhood development opportunities.
A Retrospective on CUE’s Costing and Financing Work
CUE’s journey in education financing began over a decade ago with a pivotal report by Justin van Fleet, which examined corporate philanthropy’s role in global education finance. This research inspired the establishment of the Global Business Coalition for Education to leverage business leaders in advocating for the sector. Subsequent reports identified the need for significant commitments from multilateral donors and focused on domestic financing.
In 2015, the Education Commission was established to reform and increase investment in education, leading to initiatives like the International Finance Facility for Education aimed at boosting domestic investment in lower-middle-income countries.
CUE’s focus has also shifted towards innovative financing and the role of public-private partnerships. Under Emily Gustafsson-Wright’s leadership, CUE became a proponent of outcomes-based finance as a means to enhance funding for education and early childhood development. This advocacy contributed to the creation of the Education Outcomes Fund, which pools resources for outcomes-based financing models.
The Childhood Cost Data initiative, launched in 2014, sought to generate comparable cost data for programs aimed at improving children’s cognitive, psychosocial, nutritional, and health outcomes. The development of tools like the Standardized ECD Costing Tool (SECT) and the more user-friendly Childhood Cost Calculator (C3) exemplifies CUE’s commitment to enhancing access to quality cost data for stakeholders.
Looking Ahead: Enhancing Costing and Financing Efforts
In the next phase of its work, CUE will collaborate with stakeholders globally to overcome barriers preventing effective cost data collection and analysis. The launch of “costing labs” will empower local actors and governments to make data-driven decisions, enhancing their efficiency and impact. Additionally, CUE plans to establish the Global Costing Taskforce to address global coordination issues and improve the quality of cost data in the education and early childhood sectors.
To invest equitably and effectively, stakeholders need comprehensive knowledge of both effective strategies and their associated costs. Key areas of focus include:
- Enhancing Cost Data:
- Raising awareness of the importance of cost data.
- Ensuring access to tools and resources for cost data collection.
- Building capacity to collect, analyze, and utilize cost data effectively.
- Establishing higher standards for cost data quality.
- Promoting coordination among education and early childhood actors on costing methodologies.
- Improving Financing:
- Ensuring better access to cost and financing data.
- Providing resources related to alternative financing models.
- Encouraging commitments from governments and donors.
- Enhancing data on the effectiveness of various financing models.
- Streamlining funding within the global education and early childhood financing architecture.
The next blog post will delve into initial findings from CUE’s mapping exercise of initiatives addressing these issues. Feedback and insights on this research are welcomed at ChildhoodCostData@brookings.edu.
