This document reports on financing vocational education and training (VET) in developing countries. It focuses on different ways that programs are financed, the link between financing and educational practice, and the conditions that govern the effective use of resources. Chapter I examines the use of public tax revenues to finance VET. It identifies some adverse consequences of public financing; highlights the potential for extending use of public revenues through alternatives to block grants; discusses three major issues--locus of control, equity, and vertical and horizontal imbalance; and describes some policy implications. Chapter II examines these approaches to enterprise financing of training: earmarked payroll tax; tax rebate and credit schemes; and the German dual system. Chapter III reviews alternatives to government-financed VET, including training fees, fellowships and loans, and vouchers and tuition tax credits. Chapter IV discusses production for profit and its policy implications. Chapter V examines how international donor assistance is used to finance VET. It addresses characteristics of assistance, limitations accompanying assistance, and policy implications. Chapter VI focuses on diversifying financing. The discussion of limitations and opportunities covers making better use of resources, broadening financial support, and expanding opportunity. Contains 75 references. (YLB)