There is a massive shortfall of financing for Target 4.2 of the SDGs, which is about quality early childhood development care and education for all children and indicates one year of organized learning or essentially pre-primary education in the year before entry into primary schooling, which will cost an additional US$31.2 billion per year (6x times what is currently spent). This chapter discusses three innovation in budgeting and finance in ECD: performance-based budgeting, community and local involvement in budgeting, and public-private partnerships in finance. Performance-Based budgeting is a form of financial policy planning that represents an application of science research to show what it would take to reach a desired outcome for all the young children in a country rather than budgeting for each component separately. Local budgeting is examined more closely with a case study from Commune councils in Cambodia. Creativity in public and private financing can be seen in the sharing of costs between families, NGOs, governments, etc. Social impact bonds have investors pay upfront for services that NGOs or governments provide and the repayment of loans come from predefines outcomes that are achieved within a certain period of time.
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