Three Numbers Every Education Leader Should Use

If you work in education policy, like we do at the Inter-American Development Bank (IDB), you have probably been in a finance meeting where someone quotes a single number to make the case for more investment, or to argue against it. 

We increased the education budget by 12% this year."

"We already spend 4% of GDP on education." 

"We spend less per student than our neighbors."  

Everyone nods. Nothing changes. The problem is not the numbers. It is that each of these metrics tells a different story. And if we want to move the needle on education investment at scale, if we want countries and the global community to know where to aim, we cannot use them in isolation. We need to understand what each number does  — and doesn’t do — and when to use it. *

1. Education Spending as a Percentage of GDP

This number tells you about national ambition. 

It answers the question: how much is this society prioritizing education relative to the size of its economy? It is the most commonly cited metric in international comparisons, and for good reason. It signals country commitment at the highest level.

The international community has been explicit about where this number should sit. The Education 2030 Incheon Declaration, adopted by 160 countries, recommends that governments allocate between 4% and 6% of GDP to education. That is the global benchmark. Latin America and the Caribbean as a region has fallen to around 4%, the very floor of that range, and down from over 5% before COVID. The OECD average sits at 5.1%. 

Some countries have recognized the political value of this metric by enshrining spending targets in law, creating durable floors that protect education budgets through political cycles and fiscal downturns, and that give society at large a public accountability standard to hold governments to. Several countries in the region have these floors in their legislation: Brazil, Costa Rica, the Dominican Republic or Mexico for example. These legal mechanisms are blunt instruments. But they are durable ones.  

2. Education as a Share of the General Budget

This number tells you about political competition. 

It answers the question: how is education faring against health, infrastructure, debt service, security, and every other claim on the public purse? This is a very revealing metric, because it also speaks to fiscal policy. 

It reflects whether or not education lost a budget negotiation on another ministry that had a stronger case, a more powerful constituency, or benefited from more political momentum.  

But there is a second, equally important dimension, that is the fiscal capacity of the state. In countries with low fiscal capacity, where total government revenues are modest relative to GDP, education may represent a substantial share of total public spending and still be largely insufficient when we look at per student investment. A government might allocate 20% or even 25% of its entire budget to education and still fall behind, simply because the overall envelope is too small. In low-revenue contexts, the margin for growing the education budget by shifting shares is genuinely constrained by the structural limits of domestic revenue collection. Without tax reform, without broadening the fiscal base, reallocating budget shares reaches its limits quickly.  

3. Investment Per Child

This number tells you about operational reality. 

It answers the question: what does actually reach each student? And this is where the picture often becomes less comfortable. Two countries can have identical education spending as a share of GDP and wildly different investment per child, because this number depends on how rich a country is and the number of students. 

If country A has a small GDP and a much younger, faster-growing population than country B, investment per child can be several times smaller regardless of whether or not education spending represents the same percentage of GDP. Countries in Latin America and the Caribbean tend to be right around the GDP target (lower bound), but are in the low end of the distribution when it comes to investment per student. 

This number is acutely sensitive to demographic trends. But it is also sensitive to how equitably and efficiently the system delivers resources to the classroom. How much is absorbed by administration, infrastructure inefficiencies, or procurement that does not deliver value. Vietnam is a very instructive case. It spends approximately US$1,400 per student annually, a fraction of what most OECD countries invest. And yet its learning outcomes consistently outperform countries spending three, four, and five times more. Estonia and Poland also score well on PISA while spending significantly below the OECD average. What these countries show is that the quality, targeting, and efficiency of spending matters as much as the quantity.   

A landmark IDB analysis found that overall government spending waste and inefficiencies in Latin America and the Caribbean could be as large as US$220 billion a year, or 4.4% of the region's GDP, a significant share of which flows through education budgets without reaching students. PISA results show that student performance in mathematics across the region is below what current investment levels would predict, meaning we need not only to invest more, but to achieve more with each dollar already being spent.  

So Which Number Matters Most?

The honest answer is: it depends on what is the objective and who is in the room.  

• If the goal is to build a global or national narrative, to establish that education must be a higher priority, then spending as a percentage of GDP, anchored to a benchmark, is the most powerful tool. It connects to an internationally agreed standard, to peer comparisons, to the ambition of closing development gaps. It belongs in speeches, national plans, and international commitments. It is the number of ambition.  
• If the goal is to have a conversation about political prioritization, then education as a share of the total budget is the number. It asks plainly: when your government had to make choices, where did education rank? And in contexts where the fiscal envelope is structurally constrained, it opens the door to the tax reform conversation.  
• But if the goal is to understand why outcomes are not improving despite headline budget increases, investment per child cuts through the abstraction. This is arguably the most operationally honest of the three metrics. It is the number that teachers and school directors feel every day, even if they never see it on a spreadsheet. It is the number that determines whether there are enough textbooks, whether the roof holds, whether there is connectivity and devices, or whether teachers received training this year. It grounds the conversation in classroom reality. It reveals what aggregate figures conceal: that in much of our region, the resources reaching each student are simply not sufficient to deliver the quality of education we are promising, regardless of what the GDP percentage looks like. And that is due to both: absolute investment and inefficiencies in the allocation of resources.

Spending More and Spending Better 

This is why we cannot have a conversation about increasing resources if we don’t talk about efficiencies.

These two agendas are not alternatives. They are a package. Demonstrating efficiency builds the trust and shared ownership between finance and education ministries that makes the harder conversation about growing the pie politically possible. One opens the door for the other.

The countries making the most progress are the ones where finance and education ministries sit down together, look honestly at all three numbers, and build a shared agenda around both spending more and spending better. 

The reason we struggle to make a compelling case for education financing is often that we pick one number and defend it in isolation. The most powerful argument is that one that connects all three into a coherent, realistic and honest narrative. This narrative reveals the choices a country is making, or failing to make, for its children, its present and its future.  

To delve deeper into how to optimize these resources, I invite you to download the IDB publication, Smart Spending in Education in Latin America and the Caribbean, which offers a critical roadmap for our region. 

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*Note: Inspired by my interventions at the High Level Steering Committee (HLSC) Sherpa Group meeting and the Financing session organized in the context of the G7, here is the third part of certain reflections in this framework.  

• The first blog explores related resources on why underinvesting in education is a fiscal risk—not a saving—and;
• The second blog reflects on the conditions that enable successful education reforms to scale beyond pilots and achieve lasting, system-wide impact.