Funding for higher education: Facts and figures

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Sian Lewis charts the ups and downs in donor funding for higher education in developing countries over the last half century.

Higher education (HE), including research carried out in universities, has a crucial role in development. It helps generate the human capital needed in key areas such as health, agriculture and engineering, and builds a country’s capability for self-reliance.

For example, some academics claim that one reason why the ‘green revolution’ of the 1960s and 1970s was more successful in Asia than Africa was because Asian countries had greater domestic technological capabilities. Local agricultural universities and research centres — many set up by the Consultative Group on International Agricultural Research (CGIAR) — were able to adapt the new technology to local conditions.

The least developed countries have historically received significant foreign aid to help improve their weak HE systems, particularly during the 1950s and 1960s, when the developing world became a proxy battleground for the Cold War. The United States and other Western nations poured money into Latin America and Asia, hoping to promote capitalist economic models and reduce the threat of communism, while Russia targeted funds at Africa and Cuba in a bid to rival US influence. Each focused part of their funding on maintaining university systems in these countries.

The fall from grace

But a couple of decades later HE fell out of favour. This was partly because donors and recipient governments saw it as an expensive and inefficient public service, benefitting the wealthy and privileged and producing too many social science graduates with too few job prospects.

It was also because of problems with ‘brain drain’ — institutes in Africa and the Caribbean in particular still have a hard time retaining staff once they have been trained.

And it reflected a shift in donors’ priorities, as attention turned towards short-term poverty alleviation efforts in food, medical care and emergency response. Many universities, especially in Africa, had become little more than prestige-seeking ivory towers, cut off from the real needs of the world around them, and were deemed unable to contribute to such efforts.

In the 1980s and 1990s ‘return-on-investment’ arguments became increasingly important to many large funding agencies. A much-cited 1986 World Bank study estimated that the social rate of return — the increase in national income resulting from an additional year of education — for HE was on average 13 per cent lower than returns from basic education in developing countries. [1] A later review of 98 countries from 1960–1997 found that the typical social rate of return from primary schooling was 18.9 per cent, compared to just 10.8 per cent from HE. [2]

In 1994, the World Bank stressed that HE should not be prioritised in development strategies [3] and cut its HE spending — from 17 per cent of its education funding in 1985–1989 to just seven per cent in 1995–1999.

Figure 1: World Bank lending to higher education dipped in 1994 and 2000

Source: World Bank education historical lending figures

Other donors followed suit. The 2000 World Education Forum in Dakar, Senegal, confirmed the international community’s neglect of HE in the developing world, advocating only primary education as a driver of broad social welfare improvements.

The policies adopted by developing country governments reflected the big donors’ disregard for HE. A 2005 review by Harvard University found HE was missing from most African countries’ poverty reduction strategies.

And it has had other untoward effects. HE institutions in several African countries struggle to maintain even low student enrolment rates (which in 2003 stood at less than one per cent of school leavers for many countries). And countless HE facilities, including research laboratories and university libraries, fell into disrepair because of a lack of funding.

Research too was hard-hit. African research output declined in the 1990s — when the rest of the world was moving ahead — and remains among the world’s lowest.

The return of aid for HE

In the last five years, several factors have combined to get HE back on the agendas of major donors. A growing body of literature suggests conventional economic measures of returns on educational investment do not accurately reflect the social value added by HE, which includes job creation and enhanced entrepreneurship and mobility (the ability to move across job sectors). Moreover, they ignore the positive effects of research — a core HE activity — on countries’ economies.

The development community is now more accepting of HE’s economic benefits, realising that these include creating public knowledge, exchanging skills between industry and academia and better technology. Some academics attribute India’s emergence on the world’s economic stage to its decades-long efforts to provide high-quality, technically-oriented HE. This was largely achieved through the Indian Institutes of Technology, which were set up with donor money upon Indian independence in 1947.

And in a globalised world where knowledge equals power, ‘falling behind the knowledge curve’ can have severe consequences. In such a global knowledge economy, HE can help developing countries compete with more technologically-advanced societies. [4] And with intellectual property restrictions limiting technology transfer, developing countries can no longer rely on trickle-down effects to address their development problems.

In the face of modern threats such as climate change, changing disease patterns and food insecurity, producing the skilled labour needed to carry out and apply location-specific research becomes even more important.

Ideas about ‘brain drain’ have also changed. Developing countries see the potential of bringing ‘brains’ back once they’ve received further training overseas — so called ‘brain circulation’ (see ‘Policy implications of the brain drain’s changing face‘). But achieving this relies on being able to offer good quality research facilities in universities at home.

The diaspora itself can lead to economic and private benefits at home — China and India both have strong ties with their diaspora and this is also beginning to happen in Africa. The Network of Ethiopian Scholars, for example, provides a forum for the Ethiopian diaspora and scientists working inside Ethiopia to exchange knowledge on local issues, including child health.

Changing minds

A 2000 report published by the World Bank and the UN Educational, Scientific and Cultural Organization (UNESCO), confirms the shift in thinking. It argued that HE in developing countries was in a “perilous” state and while HE couldn’t guarantee rapid development, sustained progress would be impossible without it. [5]

In 2005 the Commission for Africa, set up by the UK government, clearly suggested that the international community should recognise the value of HE for development. It recommended donors increase investments in Africa’s HE capacity and urged them to provide US$500 million a year (and up to US$3 billion over ten years) for centres of excellence in science and technology.

In 2008, the World Bank went further, acknowledging the need for “a more knowledge-intensive approach to development” in Africa and admitting that such an approach requires more focus on HE. [6] It already works with multiple partners in its HE development projects, lending an average of US$327 million per year — mostly to projects in Latin America and the Caribbean (43 per cent) and East Asia and the Pacific (21 per cent), including projects to increase access to, and management of, HE in Chile, Nepal and Vietnam.

Major donors

But the World Bank is not the only player — many governments and private foundations currently invest large sums of money to boost HE in the developing world (see Table 1).

Type of aid Definition Major donors
Bilateral aid Aid given by the government of one country directly to another France (AFD), Germany (GTZ), Japan (JICA), the Netherlands (Nuffic), Spain (AECID), Sweden (SIDA), UK (DFID), United States (USAID)
Multilateral aid Aid or loans given from the government of a country to an international agency World Bank, European Commission, regional development banks (ADB, ADB, IADB)
Private foundations Charities that distribute private rather than government/public funds Bill & Melinda Gates Foundation, Carnegie Corporation, Rockefeller Foundation, Ford Foundation, John D. and Catherine T. MacArthur Foundation, William and Flora Hewlett Foundation, Andrew W. Mellon Foundation, Kresge Foundation.

Table 1: Principal types of aid received for supporting HE and major donors. Acronyms: Agence Française de Développement (AFD), UK Department for International Development (DFID), Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ), Japan International Cooperation Agency (JICA), Netherlands Organization for International Cooperation in Higher Education (Nuffic), Swedish International Development Agency (SIDA), US Agency for International Development (USAID), Asian Development Bank (ADB), African Development Bank (ADB), Inter-American Development Bank (IADB), the Spanish Agency for International Development Cooperation (AECID)

Take France, for example, which is arguably the world’s largest bilateral donor to HE, giving almost US$1361 million in official development assistance to HE in developing countries in 2007 (see Table 2).

It uses aid to encourage university reforms, specifically helping universities in Francophone Africa restructure their qualifications to meet international standards. French aid also tries to build science capacity. Experts estimate that up to half of French aid is spent on scholarships, mostly for postgraduate study in France, but some for study in developing countries.

France’s flagship project in Sub-Saharan Africa is 2iE, the International Institute for Water and Environmental Engineering, in Ougadougou, Burkina Faso. It brings together researchers from six partner universities in Africa and seven in France. US$8 million in French aid has helped reform the governance of this once ailing institution, and train more than 3,000 technicians and executive managers for the private sector and government.








No data























European Commission


No data





No data

No data

No data















United States

No data






No data












No data





United Kingdom







No data























New Zealand


No data






















DAC countries, Total






Table 2: Official development assistance (ODA), in US$ millions, to higher education from major donors, including total ODA from member countries of the OECD Development Assistance Committee (DAC).

Source: OECD.StatExtracts

Figure 2: ODA, in US$ millions, to higher education from top 10 donors

Source: OECD.StatExtracts

The United States has also been a long-term supporter of HE across the developing world. USAID’s African Graduate Fellowship Program ran from 1963–1990 and was succeeded by the Advanced Training for Leadership and Skills project, from 1991–2003. Combined, they represent investments of US$182 million, sponsoring over 3,200 African students to get graduate and postgraduate degrees at over 200 US universities. Of these, 85–90 per cent returned to their countries of origin after completing their training.

More recently, USAID’s Higher Education for Development (HED) programme has sponsored partnerships between United States and developing country universities. Since 1987, HED has launched more than 300 partnerships in about 60 countries. These include exchanges and internships between US and Mexican universities, partnerships between schools of public health in East Africa and US universities and a collaboration between Ohio University and Punjab Agricultural University in India to research new crops and food products.

Other key providers of bilateral aid to HE in the developing world include Japan and Sweden. Japan has a track record in supporting selected HE institutions across the developing world, particularly in East Asia, and has recently introduced a new scheme for supporting joint research projects between Japanese researchers and developing country research institutions.

Similarly the University of Dar es Salaam grew from a few hundred students in 1975 to many thousands today and is a leading research centre in fields ranging from information technology to marine biology — largely due to Swedish backing.

The United Kingdom, too, supports partnerships between HE institutes having, for example, committed £15 million (US$22 million) for the Development Partnership in Higher Education (DELPHE) programme from 2006–2013. Managed by the British Council and the Association of Commonwealth Universities, DELPHE sponsors partnerships and multi-institutional projects, with 245 HE institutes worldwide. Projects range from agriculture, the environment, health and information communication technology, and also include staff and student training, course redesign and communication workshops.

Support for HE in developing countries is by no means limited to government aid — private foundations also play a large role. For example, the Bill and Melinda Gates Foundation funds the US National Academy of Sciences to work with several national science academies in Africa to make local scientists better able to inform government policymaking with evidence-based advice.

And several other US foundations have collaborated to establish the Partnership for Higher Education in Africa (PHEA). PHEA contributed more than US$150 million from 2000–2005 to build core capacity and support special initiatives at African universities, and subsequently committed a further US$200 million (see ‘US$200 million pledged for African universities‘).

PHEA focuses on information technologies, HE research and analysis, regional networks for research and postgraduate training, and university leadership. A much-publicised project is its regional satellite bandwidth consortium, which has launched a satellite network to provide cheap, reliable access to the Internet for African universities.

Home-led solutions

Without relying on direct aid, there are a number of ways that developing countries can leverage knowledge and skills from outside their borders to improve HE at home. Forging partnerships between local and foreign universities is perhaps the most widespread — and arguably the most effective — strategy.

The Malaria Research and Training Center at the University of Bamako, established by the Malian government in 1992, was developed with the US National Institutes of Health, the WHO, the University of Marseille in France and La Sapienza University in Italy. Today it is a well-equipped research centre that has helped train scientists throughout neighbouring countries, while contributing effectively to monitoring and controlling malaria.

Regional collaborations can also boost HE beyond the borders on a single country. One way of achieving this can be developing a strong national institution that creates a regional ‘sphere of attraction’ as its reputation grows. The Cheikh Anta Diop University in Dakar, Senegal and, more recently, the University of Cape Town in South Africa have both followed this route.

Alternatively, a network of universities can work together to complement each other’s activities. The Alliance for a Green Revolution in Africa is an African-led partnership that supports local universities and research institutes to train scientists specialising in high-priority crops for local small-scale farmers.

Similarly, the Global Open Food and Agriculture University, supported by the CGIAR, works with 30 universities in Africa, Asia and Latin America and with regional CGIAR centres to run Master’s programmes in agriculture, food and natural resources.

New centres of excellence can also be purpose-built, such as the African Institute of Science and Technology in Abuja, Nigeria — although opinion is still divided on whether this approach can deliver true value (see ‘Centres of excellence: not ideal for African science‘).

Inviting foreign providers to set up tailor-made courses is another option that some countries — especially those in South-East Asia — have pursued. But while this can work quite well, as in the case of the University of Nottingham-Ningbo in China, there are several policy hurdles to overcome for local governments, including questions of licensing, accreditation and recognition (see ‘Working with foreign universities to build capacity‘).

Common problems

It is clear that HE is back on the agenda for a wide range of influential donors, even though funding from the international community remains low.

Yet the situation in many countries remains dire. Poor infrastructure is often cited as a barrier to using HE for development. Other barriers include the cost of HE, school-leavers being ill-prepared for university, poor university management and overcrowding.

More worryingly, many developing country governments seem slow to support HE themselves and are failing to back rhetoric with action (the 2005 Harvard University review found only three governments considered HE in their poverty reduction strategies, and only two planned to increase funding for this purpose).

Encouraging local ownership is a major challenge for donors, partly because bilateral cooperation schemes tend to be centrally managed in rich countries. Receiving institutions often complain that donors set research agendas that match their own interests, rather than addressing local problems. The key lies in finding the right formula for a true partnership.

Partly, the problem arises from differences between allocating ‘core’ versus project-tied funding. From a demand-driven perspective, core funding, where local partners define priorities and projects, would arguably be better for capacity-building. But in reality, this demand-driven approach rarely exists. One exception is Sida, which funds the core facilities needed to improve research (including laboratories, libraries, infrastructure and research training) in at least one research-based university in each partner country (see ‘Donors must fund the essential conditions for research‘).

An increasing pressure on researchers and HE institutes to produce socially-useful results is also reflected in how donors distribute aid. They often favour applied research in key areas such as health and agriculture, with universities needing to demonstrate concrete results in order to secure funding. Many would argue this is a positive characteristic, although some researchers see it as restrictive.

And a lack of cohesion among donors, who tend to run independent programmes, has led to a scatter-gun approach to strengthening HE in developing countries that many argue results in a waste of resources.

In for the long haul

Jos Walenkamp, director for knowledge and innovation at the Netherlands Organization for International Cooperation in Higher Education, and his colleague Ad Boeren, have suggested that donors should coordinate their programmes to boost impact and sustainability, and should fine-tune capacity building and sector-specific programmes to target specific policy goals. [7] They have also called for better monitoring and evaluation by recipient governments, and more active promotion of ‘brain circulation’.

Equally important, according to other researchers, is committing to long-term support. Whatever the model for delivery, it is clear that a scale-up of donor support for HE in least developed countries will be needed — if only to meet the growing demand for HE across some parts of the developing world. Several countries are straining under this pressure, leading to ‘mega-universities’ like the National University of Mexico, which enrols more than 200,000 students each year — still just a fraction of students seeking admission.

Sian Lewis is SciDev.Net’s commissioning editor.


[1] Psacharopoulos, G., Tan, J-P., Jimenez, E. Financing education in developing countries: An exploration of policy options. World Bank (1986)

[2] Psacharopoulos, G., Patrinos, H.A. Returns to investment in education: A further update. World Bank Policy Research Working Paper No. 2881 (2002)

[3] Higher education: The lessons of experience[4.96MB]. The World Bank (1994)

[4] Kapur, D., Crowley, M. Beyond the ABCs: Higher education and developing countries. Center for Global Development Working Paper No. 139 (2008)

[5] The Task Force on Higher Education and Society. Higher education in developing countries: Peril and promise. World Bank/UNESCO (2000)

[6] Yusuf, S., Saint, W. Accelerating catch-up: Tertiary education for growth in Sub-Saharan Africa[1.39MB]. World Bank (2008)

[7] Walenkamp, J., Boeren, Ad. What donors should do. Development & Cooperation No. 09 (2007)