Financial Innovation Goes to School
PARIS – Later this month, the United Nations will discuss a high-level report on global development priorities for the period following the Millennium Development Goals (MDGs), which expire in 2015. Quality education is one of the global priorities that world leaders will be taking up.
While global health outcomes – a key focus of the MDGs – have improved dramatically in recent years, progress on education worldwide has not been nearly as satisfactory. There are many reasons for this, including the complexity of education investments, weak global governance, and – of course – money. The three largest global health-financing institutions (the Global Fund to Fight AIDS, Tuberculosis, and Malaria, the GAVI Alliance, and UNITAID) will have spent more than $55 billion by 2015, with roughly $7 billion coming from innovative financing mechanisms such as vaccine bonds, the airline levy, and debt swaps.
Despite unequivocal evidence of its positive social and economic impact, education – particularly at the preschool and primary levels – suffers from chronic under-investment. The Global Partnership for Education (GPE) has raised less than 10% of what has gone into global health, and to date no significant innovative financing mechanisms have emerged. With almost a billion children lacking access to quality education, more funding clearly is needed.