<!-- Start of picture text --> Figure 14: Sierra Leone Has Space to Expand Education Spending and Improve Outcomes<br>Potential Financing Pathways for Sierra Leone<br>a. Total education spending, b. Education spending per child, c. Learning-adjusted years of<br>$ constant PPP (millions) $ constant PPP schooling<br>650 250 5<br>2.3% 218 4.7<br>200 4.4<br>550<br>166 4 4.1<br>150<br>450 1.7%<br>100 126<br>3<br>350<br>50<br>1.6%<br>250 0 2<br>2015/16 2020/21 2015/16 2020/21 2015/16 2020/21<br>Average growth (median) Average growth (median) Average growth (median)<br>Ambitious growth (75th percentile) Ambitious growth (75th percentile) Ambitious growth (75th percentile)<br><!-- End of picture text --> _Source:_ World Bank calculations based on HCI, UIS, and IMF data. _Note:_ The data labels in panel (a) show education spending as a percentage of GDP.

In the Sierra Leone example, we have used high-spending and fast-spending-growth low-income countries as benchmarks for gauging the scope for increasing public education spending over five years. However, other benchmarks may be more relevant for specific countries and for more detailed analysis. For example, Sierra Leone has recently come out of a protracted civil war, so benchmarks associated with similar postconflict countries might be more appropriate in this case. The World Bank is currently developing a benchmarking tool that includes common comparison groups as well as the possibility for analysts to choose specific groups.

As countries run out of fiscal space or approach the efficiency frontier, the room for increasing funding for education will be limited. In the case of inadequate fiscal space, our benchmarking tool would show that a country’s resources could not increase dramatically, and thus improvements in outcomes would need to come from efficiency gains while policy makers increase fiscal space through tax reform or other means. In this case, the tool may help make the case for broader tax reform, for example. Within the education sector, however, the tool would suggest the need for efficiency gains: getting better outcomes out of existing resources. Similarly, and regardless of fiscal space, for countries approaching the efficiency frontier and not expecting large gains in outcomes, the tool would also underscore the need to increase efficiency even if resources are increased.

# 5. Spending More and Spending Better

In this paper, we have shown that government spending on education has increased significantly around the world over the last 20 years, with low-income countries registering the highest rates of growth. Economic growth has been the key driver of these gains in most countries. Other factors that have played a smaller role include the expansion of government spending as a share of GDP and an increase in the share of government budgets being allocated to education spending.

Over a single five-year period, all countries with available data between 1998 and 2017 have boosted public spending on education by an average of 21 percent. Episodes of more rapid growth have been associated with rapid increases in the prioritization of education in the budget. These rapid-growth periods have also tended to occur in countries that share a similar set of initial conditions, including budgets that devoted a smaller percentage of funds to education and government budgets that took up a smaller percentage of GDP.

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