completion is a common threshold), the ‘distance’ that the two countries have to cover are comparable. The country specific challenges are thus determined by the progress that each country has made during the 1990-2004 period and, more importantly, by the sector costs needed to achieve the individual targets. These two elements – recent past progress and sector costs – are connected because, as mentioned above, getting closer to achieving a given goal often means rising costs. Providing social services to the poorest, most remote population groups, even if these are a small fraction of the total population, is usually complex and expensive.

In terms of the non-monetary poverty MDGs and starting with education, in Honduras, the rate of alphabetization of the young has increased from 79.7 percent in 1990 to 85.5 percent in 2001 and the enrollment rates for primary education have reached 89.3 percent in 2004. Moreover, there is no apparent gender gap, as the data for primary education shows boys and girls having almost identical access and completion rates. In Ghana, significant progress is taking place in basic education, aided by the recent (2005) abolition of basic school fees and enhanced expenditure allocation towards the lagging regions (G-JAS, 2007).

# **Table** **<u>3: Government spending required for reaching MDGs: Ghana and Honduras</u>**

|Government Spending categories|Honduras<br>Required average<br>growth rates<br>(2004-2015)<br>Gov. spending as<br>share of GDP in<br>2004<br>Re|Gha<br>quired average<br>growth rates<br>(2004-2015)<br>|na<br>Gov. spending as<br>share of GDP in<br>2004|
|---|---|---|---|
|Primary education|15.6<br>3.7|3.4|2.9|
|Health|11.7<br>2.8|18.6|2.9|
|Water and Sanitation|14.1<br>0.5|15.1|0.7|
|Total Government Expenditures|17.7||24.5|

Note: Spending is valued in constant local currency. Growth rates in primary education are for the 2004-2010 period. Source: Government of Honduras (2005), AMCOW (2006), Government of Ghana (2003), World Bank staff estimates.

Although these developments in the education indicators exhibit clear positive trends, a number of studies have raised concerns about the quality of education received by Honduran and Ghanaian pupils and the efficiency of public education spending.<sup>12</sup> These common concerns are however reflected in quite different estimates of the cost of reaching universal primary completion by 2015. As shown in Table 3, although Honduras is already allocating close to 4 percent of GDP of its public expenditures to primary education, experts estimate that resource needs in this sector will grow at the average rate of 15.6 percent for the period 2004-2015. This contrasts markedly with Ghana that is spending about 3 percent of GDP on primary education and needs to expand its educational services by just 3.4 percent per year. Various factors may explain these stark differences: Honduras distribution of primary education attainments may be more unequal than that of Ghana meaning that reaching uncovered groups may be harder; inefficiencies in the primary school system may be more widespread and serious in the Latin American country; or it may use more intensively expensive resources such as

> 12 For example, World Bank (2001) notes that Honduras ranked last in language and next-to-last in math in a study assessing language and math skills in the third and fourth grades for twelve Latin American countries.  Also, World Bank (2004) found that the recent expansion in public spending on primary education was accompanied by declining efficiency.

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