Decolonizing Finance: Shifting Power for Educational Equity

Group Submission Type: Formal Panel Session

Proposal

In many low- and middle-income countries, fiscal pressures and inherited financing norms shape education systems in ways that can entrench inequality and constrain policy space. Global public debt has risen to about 102 trillion dollars in 2024, and UN estimates indicate that roughly 3.3 to 3.4 billion people live in countries spending more on interest than on health or education. At the same time, aid for education is projected to decline by about one quarter by 2027, and midyear budget adjustments often reduce teacher recruitment, learning materials, and school improvement. Expanding and protecting fiscal space is therefore a starting point. In 2024 the International Monetary Fund issued operational guidance on social spending in surveillance, lending, and capacity development. Social spending floors can help protect essential services, yet practical questions remain for education planners about program design, measurement, and enforcement during consolidation, and about whether rules and timing shield frontline inputs from midyear cuts.

Financial architecture can be redesigned to open fiscal space for education. Recent operations, for example debt for development swaps that refinance expensive liabilities and earmark savings for priority sectors, aim to reduce costs, create predictable savings, and channel funds through national systems aligned with sector plans. For instance, a 2024 multilateral development bank supported swap in Côte d’Ivoire refinanced expensive liabilities and earmarked savings for education using country systems. In July 2025 Spain and a multilateral development bank launched a Global Hub for Debt Swaps for Development to codify practice and support future transactions. Such instruments are promising when they lower financing costs, improve predictability, and link to credible sector strategies, and they require careful assessment of tradeoffs and implementation capacity.

A locally led, decolonizing perspective asks not only how much financing is available, but who decides and how accountability is structured. Despite commitments to localization, only around 1 to 2 percent of funding is provided directly to local and national actors, with limited visibility on indirect flows. Redirecting more funding and decision rights to domestic institutions is both a financing reform and a governance reform. When fiscal space and decision space align, governments and partners can prioritize interventions with demonstrated impact, for example foundational learning, language policy, early childhood, and teacher support.

Evidence on language of instruction is clear. Longitudinal research using school fixed effects finds that sustained mother tongue instruction in the early grades improves later English acquisition in South African schools, supporting bilingual approaches that build strong foundations before transition. Investments in materials, teacher development, and assessment in local languages can therefore be both equity enhancing and efficiency improving. One contribution, from a South African donor organization, will describe how a focus on language and mathematics was selected to advance equity and redress, how interventions are tested rigorously, and how successful models are supported to scale through government systems. Partnerships with Northern funders are structured as equals, with shared governance that foregrounds national priorities, requires use of local systems, and embeds monitoring, learning, and safeguards.

A second contribution, from a Latin American philanthropic organization, will present an alternative model for building institutional resilience. Rather than financing individual projects, the approach invests in organizations across the education pathway, from early childhood to youth development, including nonprofit and mission driven for profit entities. The objective is to strengthen business models and revenue structures so that proven services can scale within national ecosystems, reducing reliance on volatile external grants while maintaining an impact first orientation. For example, in Colombia, a randomized evaluation of a local partner shows positive effects on language and cognitive development for disadvantaged infants and toddlers, and an experimental study of one of the program’s documents gains in socioemotional skills in preschool.

A third contribution, from a multilateral UN agency, will bring cross country analysis on reallocating public resources toward equity and foundational learning. The central finding is that targeting resources to the most marginalized learners and to foundational literacy and numeracy yields high marginal returns and strengthens system efficiency. Practical mechanisms include progressive funding formulas, budget rules that protect frontline inputs during shocks, and accountability systems that direct funds to where learning gains are largest and that enable communities to track school level spending. Even a one percentage point increase in the share of education resources directed to the poorest could lift up to 35 million primary school aged children out of learning poverty.

Domestic resource mobilization and citizen oversight remain decisive. When revenues are raised and allocated more fairly, systems can fund teachers, materials, and early learning at scale. Evidence from participatory budgeting in Brazil shows that municipalities adopting the approach shifted spending toward essential services, such as sanitation and health, and saw associated reductions in infant mortality. This illustrates how transparent, rules based processes can improve results when institutions enable citizen oversight, a principle relevant for school infrastructure and equity focused allocations.

This panel, comprised of two Global South funders and a UN agency, will connect macro level choices on fiscal space with locally driven solutions that have demonstrated impact. It will examine when debt operations and similar tools are fit for purpose, how to design social spending floors and midyear adjustment rules that protect foundational learning, how domestic philanthropy and impact oriented investment can strengthen institutional capacity without compromising equity, and how governments can adopt allocation formulas that move resources to where they are most effective. The aim is to offer clear decision points for policymakers and partners, showing how rebalancing both financing and governance, rebalancing who sets the agenda, and decolonizing finance can deliver durable gains in equity and learning.

Sub Unit

• General Pool

Chair

• Saskia Sickinger, Dalberg Advisors

Individual Presentations

• From Donations to Investment: Building Sustainable Education through a Social Impact Holding in Colombia - Alejandra Montes, FUNDACION CARULLA

• Financing Foundational Learning: Reallocating Resources for Equity and System Efficiency - Haogen Yao, UNICEF

• Equity and Transformation in Education Finance and Partnering as Equals with Global North Funders - Fatima Adam, Zenex Foundation; Sandeep Aneja, Kaizenvest

Discussant

• Charlie Habershon, Dalberg Advisors