LONDON — The global education sector, long neglected according to some experts, could be set for transformation with the emergence of a string of new funds and financing instruments launching this year. But while the funds have the potential to channel much-needed money into learning, some development experts are asking whether their sudden proliferation risks fragmenting the sector, or duplicating efforts.

The needs are huge: According to UNESCO, 264 million children are out of school, and the United Nations estimates that a further 600 million are in school but learning little. At the same time, the share of official development assistance spent on education declined by about a quarter between 2002 and 2016, from 13 percent down to 10 percent, while ODA spending on health and infrastructure increased, according to the Education Commission’s landmark 2015 report. The report estimates that total spending on education will need to go from $1.2 trillion per year in 2016 to $3 trillion by 2030 across all low- and middle-income countries in order to improve school systems and meet the Sustainable Development Goals for education.

The new funds for global education

► Plans for the International Finance Facility for Education take shape

► Q&A: Julia Gillard on the future of the Global Partnership for Education

► Education Cannot Wait picks up the pace

► Q&A: A look at the Education Outcomes Fund for Africa and the Middle East

However, momentum around global education financing has been growing in recent years, driven in part by the Education Commission’s report, as well as by growing publicity around the “learning crisis,” as presented in the World Bank’s 2017 World Development Report.

Innovative financial mechanisms have been presented as one way of mobilizing new capital. Advocates point to global health as an example of a sector that has embraced the approach — for example, through the Global Fund to Fight AIDS, Tuberculosis and Malaria; the Global Alliance for Vaccines and Immunisation; and the International Finance Facility for Immunisation. The sector has raised $7 billion through innovative finance since 2000, according to the Education Commission. By comparison, the education sector is far behind, having raised an estimated $500 million at most through such mechanisms.

In response, the commission proposed the creation of an international finance facility for education to catalyze an additional $10 billion from the multilateral development banks. The facility is still in development but received official backing from the major multilateral development banks in May.
A billion-dollar, results-based education fund for Africa and the Middle East — the Education Outcomes Fund — has also been proposed by the Global Steering Group for Impact Investing and the Education Commission, and is currently in the design phase. EOF plans to use development impact bonds to attract upfront capital to support innovative nonstate education approaches.

These two new education financing mechanisms come hot on the heels of the launch of a new fund for education in crisis settings — Education Cannot Wait — which has been operational for just over a year.

In addition, last month the United Kingdom’s Department for International Development, the Norwegian Ministry of Foreign Affairs, and the World Bank announced the launch of an Inclusive Education Initiative to help developing country education systems be more disability-inclusive.

Finally, the Global Partnership for Education, which has been running since 2002, also recently launched its own multiplier fund. The bulk of GPE’s work is in making grants to developing country governments to implement education sector reforms. The multiplier fund enables partner countries already receiving grants to access an additional $1 from the GPE multiplier for every $3 they can raise in new and additional external financing up to $25,000.

“Yet another major fund is being set up when we already have GPE and ECW and will soon have IFFEd … Is there really a need for something additional? Why not use existing mechanisms?”

— David Archer, head of program development at ActionAid
While education advocates are pleased to see increasing interest and investment in the sector, some have warned the proliferation of new funds could lead to duplication; more hoops for low-income countries to jump through due to the growing number of partners with separate requirements and priorities; and more competition for funding. Some worry that donor-fatigue could set in as funders are asked to put money into an ever-increasing pool of instruments. Accountability could also be a challenge with more organizations to keep track of.

“I understand that there is now a real worry in the health sector about the proliferation of funds, and I am increasingly worried that this is now happening in education, which in the past had a much better track record on being truly harmonized,” said David Archer, head of program development at ActionAid.

Talking about EOF, Archer said: “It does seem quite remarkable that yet another major fund is being set up when we already have GPE and ECW and will soon have IFFEd … Is there really a need for something additional? Why not use existing mechanisms? Archer also said he is surprised the new funding instruments are being set up as separate entities instead of being housed within existing organizations such as GPE — a possibility that has been repeatedly revisited in recent times.

Earlier this year, discussions about whether to move ECW from its current home at UNICEF to GPE came to a head when the emergency education fund opted to stay within the U.N. for the time being. GPE itself is considering spinning off on its own and leaving the World Bank, where it is currently housed as a trust fund. Meanwhile, EOF is in the process of deciding whether to set up on its own or be housed by GPE, or another entity.

Lucy Drescher, head of parliamentary advocacy at RESULTS UK, said she shared the concerns around proliferation.

“We all agree there isn’t enough money for education, [and so] we can’t oppose different ways of addressing that … [but while] we are very supportive of GPE and see the need for ECW … then when you start to add the possibility of IFFEd, we know it’s not going to be successful if they don’t work together well … [Otherwise there could be] replication or a confusing picture for countries,” Drescher said.

Jared Lee, principal at EOF, agreed that cooperation between emerging and existing funds will be key. However, if managed effectively additional funds could lead to greater coherence in education aid spending, he said.

“The whole point of funds is to use donor resources to work toward common, broadly scrutinized objectives. More funds combat aid fragmentation, rather than hurt it — up to a point of course,” he said.

For Lee, it is the donors, not the funds, which pose the greatest fragmentation risk. “The real problem is a whole universe of donors who each pursue their own isolated strategies [and] pet projects, with little to no coordination or alignment between them,” he said.

Liesbet Steer, director of the Education Commission, told Devex that IFFEd, which is currently independent, has been designed to reduce fragmentation, not add to it.

“IFFEd needs to be an independent organization to be credit rated but it is designed in such a way to create a common platform for MDBs. It will work through the existing structures of the MDBs … [and] also encourages greater collaboration between MDBs at country level which would encourage greater alignment and reduce fragmentation,” she said. Steer also said that while it is important to think about reducing transaction costs in education aid at all levels, integration is not always the answer.

“Minimizing those [transaction] costs does not necessarily mean we can simply agglomerate everything in one organization. Sometimes new organizations will be necessary to create added value that cannot be achieved through existing structures,” she said.

Yasmine Sherif, executive director of ECW, agreed: “We don’t look at fragmentation, we look at comparative advantage … [Each organization] needs to focus on what it’s good [at] and work together.”

She also pointed out that the yawning funding gap for education makes it unlikely that proliferation or duplication is the problem.

“I can say with absolute conviction the challenge is not that we’re duplicating each other, the challenge is we’re not doing enough,” she said, adding that the global education sector should learn from other sectors, including global health and climate change, which have multiple players and funds.

But others aren’t so sure. Owen Barder, vice president at the Center for Global Development, said that in general there is “excessive proliferation … and insufficient consolidation” in the development space, particularly when it comes to health and education.

“There are too few exits, too few mergers and acquisitions. The result is excessive proliferation, in education as in health,” he said. Barder also disagreed with the premise that education “is too starved of money for this to be a problem,” arguing that “the sector is still very substantially funded.” The key lesson that education should take from global health, he said, is not the proliferation of funding mechanisms at its disposal but the sector’s emphasis on demonstrating results.

“The health sector has done well partly by leading the way with rigorous impact evaluations which demonstrate a clear link between inputs, outputs, and impact. That helps make the case for more spending,” he said, adding that “education needs to do the same [as EOF is trying to do] … and then the money will flow.”

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