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publicationMarch 15, 2024

Lao PDR Public Expenditure and Institutional Review: Financial Management in Education Analysis 2023

Cover Banner PEIR Laos Education Review

The Lao PDR Public Expenditure and Institutional Review and Financial Management in Education Analysis 2023 assesses funding of the education sector in Laos and looks at why gaps in enrolment, poor education outcomes, and limited job prospects for graduates persist. It outlines how the country can restore adequate funding for education, while improving the allocation and use of available resources.

In May 2023, at the Lao PDR Human Capital Summit, the government committed to improving the quality of basic education, enrolling all children and keeping them in school, and improving education financing. At present, the Lao education sector faces significant challenges. While access to education improved over much of the past decade substantial gaps remain, and previous progress has been undermined by the impacts of COVID-19 and ongoing economic difficulties.

Education quality was already poor before these shocks. The sector is severely underfunded due to a steep decline in allocated public resources. Lao children lag behind those in neighboring countries in math, reading, and writing. Many fail to enroll in secondary school or drop out early. In addition, limited job prospects for graduates reduce demand for quality education.

Education in Laos: 3 connected challenges

To address these challenges, this review recommends:

  • Comprehensive economic and fiscal reforms to increase the resources available for education and facilitate private sector development to create income earning opportunities for graduates.
  • Improve resource allocation within the sector in terms of equity and balance.
  • Introduce better teaching methods and learning materials, while making more efficient use of existing school infrastructure.

The review is based on a thorough assessment of the adequacy, efficiency, equity, effectiveness, and sustainability of public expenditure in education in Laos. A de-bottlenecking analysis identifies the key challenges and opportunities in the public financial management system for education. The report also includes an education sector financial management reform roadmap blueprint.