Are Aid Effectiveness Principles Creating An Education Funding Gap?

There is a troubling trend emerging in bilateral donor financing of basic education; namely, it is falling with what appears to us to be little coordination among donors. Aid effectiveness principles call on donors to ensure their work is complementary in part by reducing duplication through improved division of labor. This push for donors to focus on their comparative advantages, together with the increased interest in achieving results, prioritizing aid to poor countries, and tighter fiscal environments have led increasing numbers of bilateral donors to reduce the number of countries and sectors in which they work. While this is not inherently worrisome, it does become problematic if bilateral donors are not working together to identify focus countries and sectors to ensure that new gaps are not created. Without this coordination, aid effectiveness turns into the law of unintended consequences and identifying comparative advantages becomes merely an isolated exercise of prioritizing internal strengths.

In this rush to specialize, bilateral funding for basic education will be taking a hit. While the past decade has seen bilateral donor funding to education, including basic education in the least developed countries, increase – even in 2009 despite the financial crisis – this trend appears to be reversing. Projecting forward, based on announced funding changes by bilateral donors, fewer countries will be receiving aid resources for education.
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