Advancing Development by Investing in the Early Years

On the sidelines of the 2025 World Bank and IMF Spring Meetings, the CGD and Theirworld brought together global leaders to discuss advancing critical investments in early childhood development (ECD), education, and care. With 350 million young children lacking access to essential early childcare services globally, the benefits of investment extend beyond child development to women's workforce participation and economic growth. To strategically advance this agenda amid competing priorities in an era of fiscal challenges, "Increasing Financing for the Early Years: Returns for Children, Women, and Economies" convened Morocco's minister of finance and economy with key representatives from the World Bank, the Inter-American Development Bank (IDB), and the UK's Foreign, Commonwealth, and Development Office (FCDO).

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From left: Maniza Ntekim, Melinda Bohannon, Luis Benveniste, and Diana Rodriguez Franco speaking at the 'Increasing Financing for the Early Years' event on April 25, 2025.

A shared agenda from evidence to action

The discussions highlighted the multifaceted benefits of early years investments, the roles of different development actors, and effective models for policy, financing, and collaboration across the ecosystem. Below are a few key insights that emerged from the event.

Investments generate shared returns for women, children, and economies that can be immediately transformational

Throughout the event, speakers outlined how investing in ECD and childcare advances economic and social goals. Investments in the early years yield benefits across society: development outcomes for children improve, women have more time to work and for leisure, and economies see gains through job creation and increased workforce participation. Further, the impacts are cross-sectoral, meaning they do not just benefit sectors like education or health; rather, the benefits to gender equality, human development, and economic growth are cross-cutting and widespread. In her final remarks in the panel discussion, Diana Rodriguez Franco, Special Advisor to Gender and Diversity at the IDB, framed the scope of potential impact, noting that “investing in the early years benefits 8 billion people.” These powerful benefits underscore the critical importance of why investments in the early years should not be scaled back, even as governments grapple with budget challenges and donors cut foreign aid.

The speakers’ remarks on widespread impacts are supported by an increasing body of evidence. Every dollar invested in quality early childhood programmes can yield high returns - as much as 7:1 in contexts like South Africa—particularly for the most vulnerable children. Theirworld’s research demonstrates that investments in universal preschool and family support like paternal leave and child benefits can deliver measurable economic benefits in just two to three years. This has the potential to lift millions of children out of poverty while boosting women’s workforce participation. Research from CGD on the return on investment from childcare has shown impacts across a range of development indicators, particularly emphasizing the importance for women’s economic empowerment, such as research from Burkina Faso highlighted in CGD President Rachel Glennerster’s opening remarks.

Governments and MDBs have an important role to play in investing in the early years, particularly for the most vulnerable populations

To fill the existing gaps in childcare financing, governments—through domestic financing and foreign assistance—and multilateral development banks (MDBs) have an important role to play in increasing access to affordable, quality childcare services and ensuring adequate programs for supporting ECD are in place. In a fireside chat with Sarah Brown, Her Excellency Nadia Fettah, Minister of Economy and Finance for Morocco, noted that Morocco has made significant investments in ECD and childcare. Morocco has allocated 6 percent of its GDP to education, launched a national preschool strategy focused on ECD, and focused closely on children in rural and poor areas, as they were entering primary school unprepared. The results are clear and impressive. The preschool enrollment rate of children aged 4-6 increased from 45 percent to 83 percent in 2025, 55,000 local jobs were created through the opening of 60,000 preschool classrooms, and children are performing better in school. Minister Fettah emphasized the improved well-being of women and families, noting that many mothers can now work and/or rest.

As for foreign aid, Melinda Bohannon, the Director General, Humanitarian and Development, FCDO, acknowledged the difficult decisions being made around the allocation of official development assistance (ODA) and recognized the importance of evidence and impact in driving such decisions. She noted that the UK has made education an important focus of its foreign aid investments based on evidence of the positive return on investment, contributions to economic growth and poverty reduction, and cross-sectoral impacts.

The World Bank has also recognized the positive global role that it can play in the early years. Dr. Luis Benveniste, Global Lead for Education, shared that a quarter of the World Bank’s education portfolio is now focused on early education, at least a sixfold increase from two decades ago. Additionally, during the 20th replenishment of the International Development Association (IDA20), the World Bank committed to investing in childcare in at least 15 low- and middle-income countries (LMICs) to support women’s economic empowerment. Since then, demand from IDA recipient countries has been high, and through the Invest in Childcare initiative launched in 2022, investments have exceeded that goal. Work on childcare at the institution has expanded beyond the education team, such as to the International Finance Corporation (IFC), the World Bank Group’s private sector arm, demonstrating growing private sector engagement on this issue. Such multi-dimensional and far-reaching approaches can ensure that the most vulnerable are not left behind.

Creative models and integrated approaches are emerging to scale investment

The event highlighted several promising approaches and critical insights about what is working and how to do more to advance early years funding globally. Melinda Bohannon emphasised how the UK’s support for the International Financing Facility (IFFEd) exemplifies the kind of creative leveraging that can stretch limited resources further, generating significantly more investment than traditional aid approaches. However, a persistent challenge highlighted throughout the discussion was the continued siloing of early years interventions across different sectors and institutions. The Inter-American Development Bank’s new regional initiative, IDB Cares, offers a compelling model for overcoming fragmentation in early years and care investments by expanding high-quality, affordable care services for children, older adults, and people with disabilities—while also supporting women’s employment, entrepreneurship, and long-term economic growth through a comprehensive, multi-sectoral approach.

Building momentum: Looking forward

While the World Bank and IMF Spring Meetings at times took on a somber tone given global instability and increasing protectionism, the insights shared during the CGD/Theirworld event provided a hopeful outlook for building momentum on investments in ECD and childcare. To make this all a reality, action and attention on this issue is required, particularly:

1. Innovation and collaboration. In a time of decreased fiscal space and aid cuts, new approaches and partnerships are more important than ever to stretch and leverage funds. Multilateral concessional financing mechanisms such as IDA and prioritizing this agenda within remaining bilateral aid will be necessary to meet the scale of need. The IFFEd is one example of a public-philanthropic partnership that is working to fill gaps in LMICs; public-private partnerships can also be a mechanism to meet care financing needs.
2. Cross-sectoral and multi-stakeholder coordination. Effective and deliberate internal and external coordination within governments, MDBs, and between sectors will help to maximize the impact of investments in the early years. While there have been recent efforts to de-silo this work (for example between ECD and gender equality), more work is needed to ensure the whole is greater than the sum of its parts. IDB Cares and Invest in Childcare are examples of this at MDBs and can be built upon and used as models for other institutions.
3. Evidence-based decision-making. Clear and context-specific evidence can help policymakers (continue to) make the case for investing in the early years and help minimize fluctuations across political cycles. Examples of this include CGD’s recent research on childcare expenditures in sub-Saharan Africa and Theirworld and the Act for Early Years Campaign’s regular tracking of foreign aid to pre-primary education. Identifying gaps and building the evidence base for supporting investments is essential for implementing the most impactful interventions, particularly as it relates to women’s economic empowerment and children under age 3.
4. An ultimate goal of sustainable systems. Short-term projects and fragmented programs will not be enough to meet the scale needed for childcare and ECD financing. Instead, a long-term, systematic approach that embeds early childhood care and education into national budgets and policies is needed. This means ensuring a simultaneous focus on both caregivers and care receivers, investing in the care workforce, and building infrastructure that supports care needs across the lifecycle - from infancy to old age. Sustainable funding is inherent in all of these solutions; however, without a systemic approach, even well-funded initiatives will fall short of their potential.

The event also set the stage for a proposed International Financing Summit on the Early Years in 2026, a flagship goal of the Act For Early Years campaign. This first-ever global summit would unite leaders from national governments, donor agencies, multilateral development banks, philanthropy, and the private sector behind a shared agenda to drive transformative, sustainable financing for early childhood development, care, and education worldwide. With 250 million children in low- and middle-income countries at risk of not reaching their developmental potential, this summit aims to turn long-standing commitments on paper into concrete investments and action. Stay tuned for more ways to get involved in the summit in the coming months.