Compiled by the World Bank, this study of educational finance in Brazil identifies principal problems, possible solutions, and recommendations for policy changes. The study indicates that Brazil has not given high priority to educational investment, and identifies the problems as: (1) a lack of financial policy analysis and planning; (2) too little financial support for elementary education, in comparison to other educational levels; (3) financial inequities between school systems; (4) inefficient use of resources; and (5) ineffective financial transfer mechanisms. Changes in policy and administrative practices are required to improve educational decision-making within the federal government and to reduce inequities. Long-term strategies should include more thorough financial analysis and policy development, while short-term strategies should involve: (1) hiring consultants to improve policy analysis; (2) selective training of Ministry of Education personnel; (3) reducing financial inequities between state and "municipio" schools by allocating a higher proportion of federal educational transfers to the municipios; and (4) reducing bureaucratic controls on federal transfers. Thirteen tables and 21 appendices present financial, literacy, retention, enrollment, teacher qualification, and population data. (JHP)