IMF Engagement on Education Spending in Surveillance and Program Work

Engaging on education spending supports the delivery on the Fund’s macroeconomic mandate. Education is a key determinant of economic growth and development and plays a fundamental role in reducing inequalities. Public intervention in education is widespread and is generally justified on both efficiency and equity grounds. Large gaps exist across countries in both education access and learning outcomes. Following the IMF’s 2019 social spending strategy, this note provides guidance to staff on how to engage on education spending issues in surveillance and program context. The engagement is guided by an assessment of macro-criticality which can arise through three channels: spending adequacy, spending efficiency and fiscal sustainability. This note aims to guide staff on how to assess these channels. The extent and purpose of engagement on macro-critical education spending issues may vary across countries and programs. In surveillance contexts, focus on macro-critical education issues is warranted if such issues affect or have the potential to affect domestic or external stability. In program settings, engagement on macro-critical education issues may arise when such issues are critical to achieve program objectives or to monitor program implementation. When engaging on macro-critical education spending issues, it is important to collaborate with development partners.