# **_Benchmarking Spending_**

It is not difficult for finance ministers to determine whether their country is spending too much or too little on education relative to comparable countries. The UNESCO Institute of Statistics has information for most countries about their total public education spending, the share of GDP or government budget spent on education, and their education spending per student. Choose comparable countries and the minister will have the answer. For countries to establish the path forward, on the other hand, is not so straightforward. If a country is spending below what comparable countries are spending, how fast can that country expect to increase its resources? What are the policy levers that need to be pulled to achieve that level of spending?

The experience of countries that have registered the fastest growth in resources, as well as those that have invested the most in education, can provide additional useful information for other countries assessing the fiscal space they have to mobilize further public resources for education. The former countries’ experiences provide a benchmark for how much a country with similar conditions can expect to grow its resources and how quickly, while the latter countries’ experiences provide a benchmark for what level of spending a country with similar conditions may expect to achieve. In this exercise, we use the 75<sup>th</sup> percentile of both the level of spending and the change in spending as benchmarks for high spending and fast growth.

For example, Table 8 shows that over the last 20 years, only a quarter of all low- and middle-income countries worldwide have devoted more than 19 percent of their overall government budgets to education, and it seems unlikely that most countries would be able to devote a larger share over the long term. A 19 percent share of education spending in the government budget may therefore provide a benchmark for what above-average, education-prioritizing countries have spent in the past, and against which other countries that wish to increase their prioritization of education could set their own efforts. Similarly, only a quarter of low- and middle-income countries have government budgets that account for more than 28 percent of gross domestic product, so governments that wish to increase their public spending might consider this as a benchmark to aim for.

||**Table 8**<br>|**: Spending G**<br>|**rowth of Hi**<br>|**gh-Spending**<br>|**Countries**<br>|||
|---|---|---|---|---|---|---|---|
||**Real**<br>**education**<br>**spending**<br>**growth**<br>**(%)**|**Public e**<br>**spending**<br>**G**|**ducation**<br>**as a % of**<br>**DP**|**Share of e**<br>**total go**<br>**bu**|**ducation in**<br>**vernment**<br>**dget**|**Share**<br>**governm**<br>**as %**|**of total**<br>**ent budget**<br>**of GDP**|
||75<sup>th</sup><br>percentile<br>of five-|75<sup>th</sup><br>percentile|75<sup>th</sup><br>percentile<br>of five-|75<sup>th</sup><br>percentile|75<sup>th</sup><br>percentile<br>of five-|75<sup>th</sup><br>percentile|75<sup>th</sup><br>percentile<br>of five-|
||year||year||year||year|
||average<br>growth||percentage<br>point<br>growth||percentage<br>point<br>growth||percentage<br>point<br>growth|
|Low- and middle-<br>income total|43|5.5|0.6|19|1.6|28|3.2|
|UMICS|32|5.3|0.6|19|1.4|30|3.0|
|LMICs|41|6.3|0.6|20|1.6|26|3.8|
|LICs|60|4.8|0.8|19|2.4|22|2.4|

_Source:_ World Bank calculations based on UIS and IMF data. _Note:_ The 75<sup>th</sup> percentile is defined separately for each indicator. The averages for the share of education and the total government budget are based on the country period averages for 2010 **–** 13 and 2014 **–** 17. LIC = low-income country, LMIC = lower-middle-income country, and UMIC = upper-middle-income country.

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