Financing for Early Childhood Development: An Analysis of International and Domestic Sources in Low- and Middle-Income Countries

August 2016 – Results for Development published this report titled Financing for Early Childhood Development: An analysis of international and domestic sources in low- and middle-income countries. Most research on financing ECD services has been conducted in high-income countries, with limited relevance for more resource-constrained contexts. Therefore, this study fills a critical gap in the global knowledge base by reviewing and analyzing the state of financing for ECD. It examines the role of international, national, and private actors in financing ECD; the principal financial barriers to promoting access, quality, efficiency, and effectiveness in delivering ECD; and potential solutions to increase and improve the effectiveness of financing, while addressing issues of equity.

This study finds that international financing of early childhood education (ECE) has grown in volume, but remains shockingly low: only 2% of aid allocated to basic education. Bilateral sources of aid are especially limited. Domestic financing is critical to ensuring sustainability of services, yet ECD is consistently underfunded – on average less than 0.1% of GDP – relative to need and to other education levels. In comparison to other sectors and services, there is a greater mix of public and private spending on ECD, including significant household contributions.

This study concludes by proposing six strategic recommendations for both the international and domestic actors.