The reforms being undertaken by all the countries in the region (although with varying emphases and intensity); with a view to promoting a leap forward in quality and equity in education are all, generally speaking, focused on transforming various parts of the system: teaching and learning processes and content; financing of the system and resource allocation mechanisms; the distribution of functions between the State and private enterprise; decentralization of management, and, in some cases, education planning; monitoring of the quality of education services through review of teaching practices and assessment of outcomes; and the beginnings of an attempt to adapt curricula to students social and cultural conditions and to the requirements of the workplace. It is undoubtedly important to prioritize changes in education according to their impacts on student achievement because this makes it possible to realign investments in education in order to optimize their effectiveness. If the reforms have not produced all the expected benefits in terms of quality, equity or efficiency, then it becomes essential to assess past reforms, identify their successes and failures and, on that basis, modify reform paradigms in order to optimize the impact of additional resources. The point is not simply to invest more, but also to invest better. In order to assess countries financing needs for education, the present publication includes estimates of the total and additional costs that countries will need to cover between now and 2015 in order to achieve the following four major targets for educational progress agreed upon by the Governments of Latin America and the Caribbean as set forth in the Millennium Declaration, Education for All (EFA);, Regional Education Project for Latin America and the Caribbean (PRELAC); and the Summit of the Americas of 1998: achieving universal enrolment in primary education, ensuring universal completion of primary schooling, raising the net coverage of secondary education to 75% and eradicating adult illiteracy. On the basis of the financing shortfalls thus identified, the study looks at sources of funding that have not been sufficiently explored, such as contributions from the private sector and civil society, international cooperation and swapping debt servicing for investment in human capital. In addition, some of the main problems and challenges associated with improving the management of education are analysed with a view to determining how to ensure that resources invested in the education system are used more efficiently and have a greater impact on educational achievement and learning. These areas include placing school management at the service of learning; promoting greater social responsibility for education among providers, users and their families; assigning the school a special role in its management as a participatory learning community; and improving, as a matter of urgency, educational human resources and encouraging teachers to actively participate in and make a commitment to effective learning by their students.