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.