Financing for equity in primary and secondary education
1. Education resources to subnational governments
2. Education resources to schools
3. Education resources to students and families
4. Social policies and family support programmes
Introduction
In the Lao People’s Democratic Republic, education is funded primarily through three channels: government allocations, contributions from development partners, and private household expenditure. The Ministry of Education and Sports (MOES) is responsible for allocating and overseeing the national budget for the education and sports sector. Under the 2015 Education Law, education governance follows a hierarchical structure: policy and strategic oversight are first exercised by the MOES, followed by provincial and municipal departments of education and sports, then district-level offices, and finally individual educational institutions.
The World Bank (2023) has mapped the flows of public funding to educational institutions, illustrating the mechanisms and accountability pathways that guide resource distribution.
1. Education resources to subnational governments
Prime Minister’s Decree 01/2000 established a framework for a decentralised education system in which provinces serve as strategic units, districts as oversight units, and villages as development units. The State Budget Law classifies budget entities into first- and second-tier units. At the national level, the Ministry of Education and Sports (MoES) and provincial administrations function as first-tier budget units, with their annual budgets approved by the National Assembly by chapter. These first-tier units subsequently allocate funds to second-tier entities under their authority: MoES distributes budgets to its 32 subordinate entities, while provinces allocate resources to their Provincial Education and Sports Services (PESSs).
Each PESS then assigns budgets to its District Education and Sports Bureaus (DESBs) and other subordinate units. In practice, PESS budgets are prepared in coordination with MoES’s Department of Planning (DoP) and Department of Finance (DoF), ensuring that allocations across education levels are consistent with the Education and Sports Sector Development Plan (ESSDP) and receive approval from the relevant provincial government.
Under the 2015 Law on Local Administration, PESSs are accountable both to their provincial government, through provincial financial services, and to MoES. Similarly, DESBs report to MoES, typically via their PESS, as well as to their local district administration, reflecting a dual accountability system that underpins both oversight and local responsiveness in the Lao education sector.
2. Education resources to schools
National School Block Grants (SBGs) Programme
In 2011–2012, the government introduced a national School Block Grants (SBGs) programme. Schools may apply for grants to address pressing needs such as repairs, teaching and learning materials, or overdue utility bills. Grant allocations are based on the number of students in each school. In the programme’s first year (2011), the SBG amounted to LAK 20,000 (USD 2.5) per student.
The 2016-2020 Education and Sports Sector Development Plan aimed to increase the SBGs to up to LAK 100,000, but only reached LAK 70,000 (USD 8). According to the 2021-2025 Education and Sports Sector Development Plan, the plan was to increase primary SBG to 100,000 by 2023. However, the amount further decreased to USD 4 per pupil in 2022. The plan also mentions a plan to reduce disparities by potentially adjusting the SBG funding formula to provide larger grants to areas with weaker education services or performances.
Targeted Support under the Fast-Track Initiative (FTI)
Under the World Bank’s Fast-Track Initiative (FTI), 320 schools in 56 of the most deprived districts received block grants of LAK 20,000–40,000 per student. Schools not included in the FTI received LAK 20,000 per student. The initiative also provided grants-in-aid for community-based schools in 60 target districts.
World Bank and Global Partnership for Education Support
The 2021 Learning and Equity Acceleration Project, supported by the World Bank and the Global Partnership for Education, aims to improve learning outcomes for primary grades in target districts. Component 3 of the project specifically prioritises support for the SBG programme across 60 disadvantaged districts identified by the MOES.
School Clusters in Priority Districts
The 2021-2025 Education and Sports Sector Development Plan seeks to establish school clusters in 40 priority districts to improve service delivery. It also plans to review the SBG policy and revise the formula to account for higher per-student costs in smaller schools and disadvantaged areas. To address teacher shortages in rural and remote areas, the government provides incentives for teachers to work in these locations.
3. Education resources to students and families
Scholarships for Vulnerable Students
Article 45 of the 2015 Education Law provides that students from poor families, disadvantaged groups, persons with disabilities, and talented or high-achieving students—particularly women and ethnic minorities—are eligible for subsidies in accordance with regulations. Scholarships are primarily funded through the state budget, with additional contributions from the community.
The 2011–15 Education Sector Development Plan aimed to reduce disparities in those districts considered as educationally disadvantaged through scholarships. According to the 2024 Voluntary National Review on the implementation of the SDGs, the government continues to implement programmes to alleviate poverty, including financial assistance, subsidies for school-related expenses, and scholarships for economically disadvantaged families. The review emphasises the need for ongoing support and prioritisation of scholarships and stipends across all education levels.
4. Social policies and family support programmes
Conditional Cash Transfer Programme: Helping Hand
The Lao People’s Democratic Republic launched its first Conditional Cash Transfer programme, Helping Hand, in 2021. The programme provides cash grants to poor and vulnerable households that include pregnant women or children under two years of age. Funded with support from the World Bank, it has expanded from 12 poor districts to a total of 26. Beneficiaries are required to attend Social and Behaviour Change Communication sessions. The programme does not include any component related to compulsory education.
5. School meal programmes
The 2021-2025 Education and Sports Sector Development Plan calls for the development of a financially sustainable policy to implement school meals and nutrition programmes at various educational levels. The policy aims to target disadvantaged students in food-insecure areas and incorporates recommendations from previous research and the World Food Programme (WFP). Key activities include targeting 40 disadvantaged districts and providing both food and necessary equipment.
Programmes which provide school meals include the Promoting Schools Lunch Programme, the School Lunch Project, and Learning and Engaging All in Primary School (LEAPS). Only the first two are led by or with the MOES.
Promoting Schools Lunch Programme
Originally the National School Meals Programme (NSMP), this programme was updated under the 2016/17 Policy on Promoting School Lunch. Operating since 2002, it is primarily led by the MOES and is undergoing decentralisation. The programme targets pre-school, primary, boarding, and special needs schools, with nutritionists involved in its planning and implementation.
School Lunch Project
The School Lunch Project began in 2017 as the WFP School Feeding Programme, led by the Inclusive Education Promotion Center (IEPC) under the MOES and the World Food Programme. Responsibility for the programme was fully assumed by the MOES in 2019. The project prioritises schools based on geography, vulnerability to food insecurity, poverty levels, and poor educational outcomes.
