• Sources and levels of financing

Sources and levels of financing

This document examines the problem of poor parents having to pay to send their children to school in countries where governments lack either the financial resources or the political will to meet their citizens' educational needs. It argues that, given the alternative (children receiving no education at all) such school fees and user payments can represent a temporary, if less than ideal, solution to the problem.

The document also looks at educational attainment in poor countries, as well as the supply and demand shortfalls. The paper explores the pros and cons of user payments, looking at case studies in Chad, Malawi and Uganda.

Conclusions of the paper include:

• user payments for basic education should never be more than a temporary solution: the ideal arrangement and the appropriate goal of education policy remain universal education financed by government out of public revenues
• user payments are undesirable because they are a regressive tax when school attendance is compulsory
• voluntary user payments are undesirable because children are excluded from schooling if their parents are unable or unwilling to pay school fees
• statistics show that primary school enrollment and completion rates are low in many low-income countries, where underfinanced budgets, weak administrative capacity in the government bureaucracy, and lack of political will (indeed, political opposition to broadening access to educational opportunities) can deny children of poor parents an education. In these compromised circumstances, user payments may have a role to play
• effectiveness of user payments will depend on whether the reasons children are not in school are demand-side or supply-side
• if children are unschooled because of a lack of demand resulting from their parents' poverty, information problems or a social bias against educating girls, imposing user payments cannot be expected to increase school enrollment
• if the problem is on the supply side, and the government is unable or lacks the will to provide publicly financed schooling, user payments are a way of addressing the unsatisfied demand for education.

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