Public expenditure reviews for education : the Bank's experience

Public expenditure reviews (PERs) are an excellent vehicle for analyzing important sector issues in the context of the overall economic and fiscal situation. PERs should give as accurate a picture as possible of how funds to the sector are allocated and disbursed. The education sector (like other social sectors) has specific characteristics that affect the relationship between sector and macro expenditures that can skew the impact of"sector-neutral"policies. PERs should pay explicit attention to these concerns, which include : a) the different time frames for the attainment of macroeconomic and education sector goals; b) the often substantial part of education sector spending that is outside the purview and control of the Ministry of Education; c) the low ratio of nonwage to wage expenditures within the sector's recurrent budget; and e) the large and capital-intensive foreign financing component of sector funding in many low-income countries, which is often fragmented among many donors and projects. The treatment of the education sector in PERs must be analyzed in the broader context of Bank operations. This report is the first step in a broader research agenda which includes : 1) analysis of effects of adjustment operations on the sector; and 2) development of guidelines for an improved analysis of sector-specific cost and financing issues in the macroeconomic expenditure context.