The different rates of expansion in enrolment at the first, second and third levels of education have produced an altered composition of pupil and student population. Since costs per place rise with the level of education, the change has forced up both average and total costs. It is thus the countries with the lowest secondary enrolment ratios, where the pressure for additional secondary places is felt the keenest, which face the fastest cost escalation if they try to accommodate demand. Since they also have typically the least favourable pupil-to-teacher ratio and meagre resources, the underlying cost structure acts as a formidable barrier to expansion – more so if standards are to be maintained.
In socialist and developed market countries, the average cost of maintaining a child in secondary school can be as much as double that of a primary place. In Latin America the situation is comparable. In Asia and the Pacific region, the cost differential is well in excess of 100% in one third of the countries reporting the relevant data. In Africa the position is extreme in that the cost difference is almost always above 100% and in half the countries more than 500%. At the third level, average costs are still higher. The third-to-first level cost ratio is typically less than five in developed and above five in developing countries. In Africa the recurrent cost of a place in a publicly funded third-level institution is now usually as much as 44 times the cost of a primary school place. or beneficial allocation of resources. But in many African nations, university constituents control the public discourse on education policy because they are well represented by student and faculty unions and have access to education-sector information.
In developing countries, the expansion in numbers and escalation in costs coincided with a period of steady and, in places, even rapid, growth in real income. The substantial shift of resources to education through the budget that occurred in the 1965-1977 period was typically financed by newly-generated resources. Even so, in nominal terms, public spending rose in relation to gross national product, substantially in both Africa and Asia and less markedly in Latin America. As a result of the slow-down in economic activity at the end of the 1970s and the beginning of the 1980s which coincided with a period of unfavourable terms of trade, all but a few developing countries have run into serious budgeting problems which make increased spending on education at historic rates impracticable.