Four papers were presented at a conference of 16 donor agencies involved in funding educational development and research. The conference focused on world investment in education, constraints on educational funding, and experiences with educational innovations aimed at improving cost effectiveness. Following an introductory overview of the conference, the first paper--"Adjusting to the 1980s: Taking Stock of Educational Expenditure," by Keith Lewin and others--develops the case for maintaining real educational expenditures at 1970s levels. "The Political Economy of Financing Education in Developing Countries," by Martin Carnoy and others, focuses on social demand for education and describes a cross-national study of educational demand, expenditures, and governments' political legitimacy. Nelly Stromquist's "A Review of Educational Innovations to Reduce Costs" examines the cost effectiveness of new educational technologies, nonformal education programs, and changes in the formal school system. "Priorities and Problems in Education for Development," by J. King Gordon, reports on a survey of European government agencies and international organizations involved in financing Third World educational development. Brief comments on the conference are presented from representatives of the World Bank, Kenya, Thailand, and Colombia. References for the papers and a list of conference participants are included in the document. (RW)