Draft:Education financing in Bolivia

Education in the Plurinational State of Bolivia has seen significant improvements in the engagement in schooling since 2000, as a result of debt relief, resource nationalisation, wealth redistribution and political and educational reforms, which have supported a major increase in public spending on this policy area. According to UNESCO, "Bolivia have turned one the world's most unequal education systems into one of its most inclusive in just a few years", with attendance comparing well to other Latin American countries^[1].In Bolivia, high proportions of children now complete primary (98.7%) and lower secondary education (93.1%),^[2] with dramatic increases in the proportion of young people from the poorest households attending and completing school.

However, while improved, there are disparities in the participation in education at upper secondary school level (75.85 completion rate)^[2]. UNESCO highlights the increasing pressure on children over the age of 14 to start work to support their families^[1] .The country's education system is considered to be in a period of transition towards the 'Productive Socio-Community Educational Model', which involves reform of the curriculum, institutions, teaching and finance.^[3]

Officially known as the Plurinational State of Bolivia, it is the largest land-locked country in the Southern Hemisphere and is located in central South America. As of 2024, Bolivia's population was 11.3 million^[4] and 41% of the population who are over the age of 15 identify as indigenous.^[5] There are 36 ethnic groups, such as Aymara, and Chiquitano^[5].

The GDP Per Capita of Bolivia in 2024, was $3,920, one of the lowest in South America.^[6] Bolivia is classed as a Lower-Middle Income Country (LMIC)^[4] its economy is reliant on commodity exports,^[7] which has made is vulnerable to multiple debt crisis since independence. The wealth of natural resources, and rich landscape for agriculture means that the majority of Bolivian exports include natural gas, minerals and soybeans, Brazil nuts, and meat^[4]. The Gini Co-efficient, which measures disparities between rich and poor measured at 40.9% for Bolivia in 2024.^[8]

Bolivia has endured significant inequality amongst rural and indigenous populations during and since imperial rule. The country was colonised by Spain in 1524, and a period of colonial exploitation ensued until independence in 1825.^[9]

Since independence, Bolivia's political leadership has been unstable, there have been periods of authoritarian rule and over 120 military coups.^[10] However, since the turn of the century, Bolivia has become more stable^[10]. The first indigenous President, Evo Morales was elected in 2006 and enacted a new constitution in 2009, which pledged to reduce inequality amongst the indigenous populations, through policies of resource nationalisation, and education reform such as the Avelino Siñani–Elizardo Pérez Education Law.^[11]

These polices have resulted in sustained participation in education since their implementation. However, success has been uneven and problems of the quality of schooling, teacher retention and engagement with girls, indigenous people and disabled people remains poor. Notably, whilst education reform has aimed to improve indigenous literacy rates and decolonise the education system success has fallen short.^[12] Additionally, lack of effective spending, i.e targeting rural areas and deprived groups has partially resulted in inequality of education provision, and varying outcomes^[12].

Total country spend on education: government, household, aid and private sector

The majority of education in Bolivia is financed by the government.^[13] In 2024, the Bolivian government expenditure on education was 7.4% of the country's GDP, which equates to $10472.97 PPP in real terms,^[14] using an exchange rate based on purchasing power parity (PPP). The UIS calculated education expenditure as 20.16% of the government's total expenditure^[14]. Whilst this percentage is high among Latin American Countries (LAC), the actual budget is smaller.

Bolivian households spending on education is $479 in absolute terms, the lowest amongst Latin American Countries in 2014^[13]. Overall, households tend to spend more on higher education, whilst the government spends more on secondary education^[13].

Bolivia is a recipient of Overseas Development Aid (ODA), which is supports governments in the facilitation of economic development and welfare reform.^[15] During the period of 2017 – 2019, the amount of ODA Bolivia has received has been decreasing.^[16] In 2019, the country spent 8% of its ODA provision on education. This was primarily funded by the Inter-Development Bank (IDB), bilateral assistance from France and the European Union (EU)^[16].

Additionally, UNICEF is funding a grant of a total of US$1,100,000 from 2023-2026, for the purpose of increasing engagement, retention and quality of education in Bolivia, with particular focus on improving education outcomes among girls, indigenous people and people with disabilities.^[17] This is facilitated through collaboration with several governments, including France and Switzerland, international financial institutions such as the World Bank, UN agencies and other UNICEF National Committees^[17].

The government can also direct funding through the private sector, this is often through scholarships or bursaries, and student loans^[15]. These initiatives have been delivered through the UNICEF Grant, collaborations with universities across Bolivia and major Bolivian companies in their sector such as Red Uno (media), Nacional Seguros (insurance) and Farmacorp (pharmaceuticals) provide opportunities for Bolivian students to study within their industrial sector^[17].

Government spending on education

Graph showing Bolivia Government expenditure on Education a % of GDP. Data sourced from UIS

In Bolivia, two years of pre-primary school and 12 years of primary to secondary education is free for its citizens.^[1] The majority of education in Bolivia is financed by the government.^[13]

Public expenditure on education in Bolivia has increased during the last two decades. In 2006, government spending on education was $2.62 million at PPP; this has risen to $10.47 million at PPP in 2024, an increase of almost 300%.^[18] The public spending increase was reflected in a larger proportion of the country's GDP being spent on education, increasing from 6.3% in 2006 to 7.4% in 2024^[14]. However, a UNICEF Report highlighted that the distribution of funds per-capita across municipalities in the country are uneven^[17].

In addition, Pablo Salas is among academics who are concerned over the sustainability of the increased government spending on education. While, public expenditure on this policy area has risen steeply, it is funded through income derived from commodity sales in nationalised industries. Bolivia's GDP grew robustly from 2006 to 2019, fuelled by the sale of oil and natural gas, peaking in 2013 with a growth rate of 6.8%.^[19] However, the economy contracted sharply during the Covid pandemic and while it bounced back after 2020, it has contracted again in 2024, shrinking by 1.1%^[19], as a result of falling natural gas production and increasing inflation, unofficial exchange rate and fiscal deficit.^[20]

Government education spending has included funding a Conditional Cash Transfer (CCT) policy known as Bono Juancito Pinto.^[21] This policy was launched in 2006 and provides students with 200 Bs ($28) per year, on the condition of above 80% attendance^[21]. The scheme supports both primary and secondary school children, impacting almost 2 million students^[1]. The CCTs were implemented by then-President Evo Morales, who funded it through the nationalisation of the hydrocarbon industry which was raising big revenues at the time^[21]. The Bolivian scheme followed a trend of CCTs implemented in Latin America such as "Progresa—Oportunidades in Mexico and Bolsa Escola—Bolsa Família in Brazil", although Bolivia's is one of the biggest^[21]. Some have raised concerns about the reliability of funding CCTs through hydrocarbon revenues, because of the instability and fluctuation of commodity markets reliant on foreign exports^[21].Since 2019,  reduced revenues from natural gas has become a challenge for the Bolivian economy and government^[20].

Education aid

In 2010, the government introduced an education reform act known as the Avelino Siñani–Elizardo Pérez Education Law. This law implements compulsory education in both primary and secondary schools, new teacher training programs, decolonialisation of the curriculum and an 'alternative learning' provision in line with Sustainable Development Goal (SDG) 4.^[22] Some of the programs implemented as part of this law will be funded by a $40 million loan from the Inter-American Development Bank.^[23] The loan will facilitate the implementation of 'socio-productive skills' through the implementation of "three school models: Experimental Technology Centre, Comprehensive Education in Technical Studies, and the Humanities"^[23]. These will be based across nine departments in areas of varying urbanisation^[23]. Of the total loan, $8 million is funded by the Fund for Special Operations, the interest rate is 0.25% and there is a grace period of 40 years^[23]. For the remaining $32 million, the interest rate will be determined by the London Inter-Bank Offered Rate (LIBOR), a benchmark interest rate that reflects the rate charged on inter-bank lending among leading banks, and the funds will be  released over a period of 30 years.^[23]

Additionally, private/public partnerships such as the Pan American Development Foundation (PADF), support education initiatives across Bolivia. The PADF have supported and implemented social inclusion, education and small-scale infrastructure projects in Bolivia. The education scheme, called Tecnonautas, aims to improve students "21^st century skills", which include critical thinking, digital skills and problem-solving.^[24] It supports STEM clubs in over 18 schools impacting 1,545 students and 304 teachers.^[25] The clubs encourage students to engage with challenges in their local areas such as, waste management and access to clean water, and create "socio-environmental community projects" to address them^[25].

Debt and education

In 1998, Bolivia met the conditions of the Heavily Indebted Poor Country (HPIC) Initiative which allowed for some of the country's debt to be cancelled by the International Monetary Fund (IMF).^[26] The HPIC Initiative was set up to create space in developing countries budgets for sufficient spending on healthcare and education, instead of debts.^[27]

In 2001, the IMF and World Bank cancelled a further $1.3 billion, however only reduced the debt to a level considered payable^[28] In 2005 Bolivia's IMF-owed debt fell by $233m,^[29] and in 2007 the World Bank and Inter-American Development Bank also offloaded some of Bolivia's debt^[28]. Debt Justice calculates that from 1998-2012 approximately $2.2billion was saved, and by the 2045, when the last debt payment was due, Bolivia will have saved $5.4 billion in debt^[28].

Furthermore, in 2006, Spain agreed to forgive $120m of Bolivia's debt on the understanding that the money is re-directed into education reforms in the country.^[30]

Despite this, in 2026, Bolivia's total public debt accounted to 94% of its GDP.^[31] This is the second highest debt of a lower-middle income country.^[32] Bolivia's external debt, which is money owed to multilaterals, bilateral or private enterprises, accounts to 27% of its GDP whilst the domestic debt is 67%^[31].

IMF and World Bank conditionalities and education

The first world bank loan to Bolivia, specifically for education financing was in 1977. It was a $15 million loan for education and teacher training in Le Paz, the capital of Bolivia. The loan was approved for a period of 20 years, with 8.5% interest. It was specifically targeting "primary and community education in Le Paz and vocation training across the country".^[33]

In 1994, a World Bank loan of $26.7 million was agreed for Education Reform. This included, improving the quality of the teaching, developing the curriculum and improving access to resources such as textbooks.^[34]

In 2008, a World Bank loan of $77.5 million was agreed to support the poorest people in Bolivian society, in line with Evo Morales' core aims.^[35] The loan targeted "education, agricultural development, rural investment, sustainable development and natural disaster prevention".

In addition, Bolivia has been the recipient of multiple IMF development programmes. Firstly, an Enhanced Structural Adjustment Facility (ESAF) included a loan of $138 million from 1998 until 2001. The ESAF was implemented in Bolivia to facilitate economic reform, a key policy was privatisation of all public enterprises including "the state oil company YPFB's refineries by June 1999".^[36] The ESAF policy also addressed social inequality, with respect to education. A key policy implemented by the Bolivian government was the decentralisation of education governance to local governments.^[37]

In 2000, the IMF approved another development loan, as part of a Poverty Reduction and Growth Facility (PRGF), which accounts to $46.1 million over three years.^[38] Under this policy, privatisation remained a core condition of the loan, along with reforms to the tax system and labour regulations.

IMF policies with conditions of austerity and privatisation can have detrimental impacts to low-lower middle income countries, as they  are "forced to sacrifice the health, education, social protection, well-being and the future prospects of their citizens, following strict IMF austerity steers"^[27].

Illicit financial flows and education

Bolivia experiences significant financial losses as a result of illicit financial flows that limits its ability to invest in education and other basic public services. Illicit financial flows (IFFs) "refer to the movement of money across borders that is illegal in its source, its transfer or its use"^[39].The International Development Committee of the British Parliament, states that tax evasion is the most common form of IFF in developing countries.^[40]

The tax Justice Network estimates that Bolivia loses $141 million in tax abusee annually. The TNJ has calculated $91.90 million is lost to tax havens equating to 2.56% of education spending, and $8 lost per month of the population^[40]. In Bolivia, tax evasion committed by private individuals moving money offshore, accounts for $30 million of Bolivia's losses, whilst $62 million is lost through tax evasion by multinational corporations, which fail to pay their bills^[40].

Latin America is one of the worst affected regions of tax evasion, with $376 billion of tax revenues lost annually^[41] and "over one-half of all financial assets of high net-worth individuals on that continent are held offshore, almost entirely evading taxes"^[41].

In 2017, with the release of the Panama Papers, a huge leak of confidential documents from a Panamanian law firm, over 127 offshore companies connected to Bolivia, were revealed to be registered predominantly in Panama and the British Virgin Islands.^[42] These connections implicated Bolivian business and Politicians in moving their asses offshore to avoid paying tax^[42]. The papers reveal that 93% of the 127 offshore Bolivian connected companies, were registered between 2006 and 2015, after the election of President Morales^[42]. IFF can be problematic for the economic stability of a country and can drain government resources from public spending initiatives^[39].

In countries where taxes increase, and new regulations are implemented in the labour market and provision of goods and services, showdown economic can develop. In 2007, Bolivia was estimated to have the largest shadow economy of any country globally at an average of 66% of GDP.^[43]

In response to IFF, Bolivia joined the 'Global Forum on Transparency and Exchange of Information for Tax Purposes' in February 2025.^[44] As the 16^th Latin American member, Bolivia is committee to combatting offshore tax evasion through the implementation of the internationally agreed standards of exchange of information on request and automatic exchange of financial account information under the Common Reporting Standard^[44]

Although, Bolivia ranks in the top third of countries for financial secrecy globally^[40]. The Financial Secrecy Index determines how much states laws and regulation enable financial secrecy. A country is scored out of a 100, which is the worst. In 2025, Bolivia's score haven secrecy score was 77/100^[40].

Climate Change and Education

Bolivia is vulnerable to climate change as a result of glacial retreat, water shortages, increasing temperatures and the spread of diseases, such as malaria, dengue an yellow fever.^[45]

Climate disasters can damage schools, infrastructure and disrupt access.^[46] The Institute of Development Impact stresses that children are significantly impacted by climate change. In 2025, of the 1.3 billion school aged children living in areas vulnerable to climate change, 90% of them were in middle/low-income countries^[47].. Only 0.3% of climate finance is spent supporting the education of children impacted by climate change and extreme weather events^[48]

In 2024, a $250 million contingent loan to Bolivia was approved by the IDB^[49].This loan means that Bolivia can access financial resources in the event of a natural disaster to support the cost of immediate care^[49]. This loan also covers the cost of rebuilding public infrastructure and services such as schools to reduce the long-term impacts of disasters^[49].

Additionally, at COP29 an agreement between "The Green Climate Fund (GCF) and the Global Partnership for Education (GPE) and Save the Children has created a $70 million investment fund to build climate-resilient schools in vulnerable counties".^[50] Whilst this doesn't immediately include Bolivia, success in the pilot countries, the investment will be expanded^[50].

References

1. UNESCO. "Global Education Monitoring Report: Access and Equity". unesdoc.unesco.org. Retrieved 2026-05-05.
2. UNESCO. "SDG 4 - Country Profiles: Bolivia (Plurinational State of)" (PDF). UNESCO PDF.
3. Justiniano, Carrión; Fernando, Luis (2021), "The Educational System of the Plurinational State of Bolivia", The Education Systems of the Americas, Springer, Cham, pp. 175–212, doi:10.1007/978-3-030-41651-5_41, ISBN 978-3-030-41651-5, retrieved 2026-05-19
4. "Bolivia | World Bank Group". www.worldbank.org. Retrieved 2026-05-19.
5. "Bolivia". 2023-11-02. {{cite journal}}: Cite journal requires |journal= (help)
6. Neufeld, Dorothy (2024-12-06). "Mapped: Latin America's GDP per Capita by Country". Visual Capitalist. Retrieved 2026-05-19.
7. Kofas, Jon. V. "The Politics of Austerity: The IMF and U.S. Foreign Policy in Bolivia, 1956-1964". Journal of Developing Areas. 29 (2): 213–236 – via JSTOR.
8. "https://data360.worldbank.org/en/indicator/WB_WDI_SI_POV_GINI". World Bank Data360. Retrieved 2026-05-19. {{cite web}}: External link in |title= (help)
9. Hudson, Rex A.; Hanratty, Dennis M. "Bolivia: a country study". Federal Research Division, Library of Congress.
10. Seelk, Clare Ribando (2020). "Bolivia: An Overview". Congressional Research Service.
11. UNESCO (2023). "Concept of Lifelong Learning".
12. The Borgan Project. "The Education Divide: Why Millions of Children Lack Education". {{cite web}}: Missing or empty |url= (help)
13. Arcerenza, Santiago; Gandelman, Nestor. "Household Education Spending in Latin A merica and the Caribbean: Evidence from Income and Expenditure Surveys" (PDF). Inter-American Development Bank.
14. UIS. "Government expenditure on education as % of GDP". UNESCO.
15. OECD. "Official development assistance (ODA)". OECD.
16. UNFPA. "UNFPA Bolivia Country Programme Evaluation" (PDF). UNFPA.
17. UNICEF. "UNICEF Bolivia: Annual Report 2024". UNICEF.
18. UIS. "Government expenditure on education, PPP$ (millions)". UNESCO. Retrieved 2026-05-05.
19. "World Bank Open Data". World Bank Open Data. Retrieved 2026-05-19.
20. "From crisis to stability: what next for Bolivia's economy?". Economics Observatory. Retrieved 2026-05-19.
21. Salas, Pablo Evia (2021-12-02), "Cash transfers as citizens' dividend of the resource boom", Andean States and the Resource Curse (1 ed.), London: Routledge, pp. 54–69, doi:10.4324/9781003179559-5, ISBN 978-1-003-17955-9, retrieved 2026-05-05
22. UNESCO (2023). "Bolivia: Education Law 'Avelino Siñani - Elizardo Pérez'".
23. "IDB | IDB loan will support the Productive Community Secondary Education model in Bolivia". www.iadb.org. Retrieved 2026-05-19.
24. "Tecnonautas Bolivia – Educación STEM para todos!". tecnonautasbolivia.com. Retrieved 2026-05-19.
25. "Education - Countries". Pan American Development Foundation. Retrieved 2026-05-19.
26. Jones, Tim (2012-09-05). "Impact of debt relief in Bolivia". Debt Justice. Retrieved 2026-05-19.
27. Archer, David (2026). "Breaking out of the global education financing bubble". UNESCO.
28. Jones, Tim (2012-09-05). "Impact of debt relief in Bolivia". Debt Justice. Retrieved 2026-05-19.
29. Mason, Paul (2006). "BBC NEWS | Talk about Newsnight | Will Bolivia kiss the IMF goodbye?". www.bbc.co.uk. Retrieved 2026-05-19.
30. "Spain to write off Bolivian debt". 2006-01-05. Retrieved 2026-05-19.
31. Paduano, Stephen (2026-04-13). "A New Day for Bolivia : The Anatomy of a Crisis and the Options Ahead". FinDevLab. Retrieved 2026-05-19.
32. October 21, Brian Seel |; 2025. "In Bolivia, Tough Debt Decisions Await Paz". Americas Quarterly. Retrieved 2026-05-19. {{cite web}}: |last2= has numeric name (help)
33. World Bank (1977). "WORLD BANK SUPPORTS AN EDUCATION PROJECT IN BOLIVIA" (PDF).
34. World Bank (1994). "Bolivia Education Reform Project" (PDF).
35. World Bank. "Bolivia and WB Sign US$77.5 Million Loan Agreement to Support Key Development Areas" (PDF).
36. "Press Release: IMF Approves Three-Year Arrangement Under the ESAF for Bolivia". IMF. Retrieved 2026-05-19.
37. "Press Release: IMF Approves Three-Year Arrangement Under the ESAF for Bolivia". IMF. Retrieved 2026-05-19.
38. "Press Release: IMF Approves Second Annual PRGF Loan for Bolivia". IMF. Retrieved 2026-05-19.
39. IMF. "The IMF and the Fight Against Illicit Financial Flows". IMF. Retrieved 2026-05-06.
40. Tax Justice Network. "Country Profile: Bolivia". Tax Justice Network. Retrieved 2026-05-06.
41. International Development Committee. "House of Commons - International Development Committee: Written evidence submitted by the International Secretariat of the Tax Justice Network". publications.parliament.uk. Retrieved 2026-05-06.
42. Díaz-Struck, Emilia (2017-10-29). "Panama Papers investigation reveals Bolivia's offshore connections - ICIJ". Retrieved 2026-05-06.
43. Schneider, Friedrich; Buehn, Andreas; Montenegro, Claudio E. (2010). "Shadow Economies All over the World: New Estimates for 162 Countries from 1999 to 2007" (PDF).
44. "OECD Archive Viewer: Bolivia becomes the 172nd member of the Global Forum". web-archive.oecd.org. Retrieved 2026-05-19.
45. "Climate change, inequality and resilience in Bolivia". Oxfam International. 2022-05-25. Retrieved 2026-05-19.
46. "Climate Finance for Education: A Review of the World Bank's Education Financing". Center For Global Development. Retrieved 2026-05-19.
47. Kogan, Penelope (2025-02-11). "Climate Education Policy in the Global South". Institute for Development Impact. Retrieved 2026-05-19.
48. Kogan, Penelope (2025-02-11). "Climate Education Policy in the Global South". Institute for Development Impact. Retrieved 2026-05-19.
49. "IDB | Bolivia Increases its Resilience to Natural Disasters, Public Health Emergencies with IDB support". www.iadb.org. Retrieved 2026-05-19.
50. Fund, Green Climate (2023-12-02). "The Green Climate Fund, the Global Partnership for Education and Save the Children launch the world's largest investment for green schools at COP28". Green Climate Fund. Retrieved 2026-05-19.