The world is shifting. With the United States pulling back from its global commitments, international schools, long reliant on external funding and governmental subsidies, face an uncertain financial future. The question confronting school leadership today is not simply how to tighten budgets but whether they can recognize the trap that many will inevitably fall into: the Sunk Cost Fallacy.
The Sunk Cost Fallacy, a well-documented cognitive bias, dictates that decision-makers continue investing in failing endeavors simply because they have already committed significant resources. This fallacy manifests itself when school leaders double down on outdated programs, obsolete technology, or ineffective pedagogical models rather than embracing needed change (Ronayne et al., 2021).
A classic example is found in education technology investments. Many schools have spent millions on one-to-one device programs, only to later realize that these tools do not significantly impact learning outcomes. As Didau (2025) argues in the context of technology in schools, "We have an irrational response to having wasted time, effort or money: I’ve committed this much, so I must continue, or it will have been a waste." Instead of acknowledging these missteps, leadership often pours additional resources into training and infrastructure, perpetuating inefficiency (Didau, 2025).
Similarly, curricular models that were once seen as cutting-edge are now proving outdated, yet schools persist in funding them rather than adopting flexible, research-backed alternatives. Boyd, Harris, and MacNeill (2023) describe this phenomenon as Commitment Bias, where decision-makers continue to support a program "which has not produced the desired results, and rather than lose face, the authors claim that an increased commitment is what is needed to get the promised results." This commitment to legacy programs is not a sign of strategic thinking but of entrenchment, where admitting failure is seen as a greater risk than inefficiency (Boyd et al., 2023).
Lessons from Failed Investments
In 2011, the New South Wales (NSW) government invested $261 million in the Reading Recovery program, believing it would dramatically improve literacy. However, subsequent evaluations indicated that while the program had some short-term benefits, it was not an effective long-term intervention. The initiative persisted for years before being discontinued in 2020, but only after additional resources were expended (Boyd et al., 2023).
School leaders must ask themselves: Are we funding programs that will define the future of learning, or are we simply sustaining projects because of the money we have already spent?
Technology: A Strategic Pivot or a Sunk Cost Nightmare?
The issue of outdated technology is particularly acute in the educational landscape. Schools often continue to maintain aging IT infrastructures simply because the initial investment was high.
For example, many institutions still operate on-premise legacy systems for student management and communication, despite the clear advantages of cloud-based solutions. These systems are costly to maintain and lack the adaptability needed for modern education (Aimsio, 2019). Yet, rather than migrating to flexible, scalable platforms, leaders often justify continued spending on maintenance due to the large sums already invested in legacy IT (Advantage Communications Group, 2024).
Breaking Free: Thinking Outside the Box
How can international schools avoid falling into the sunk cost trap?
Final Thoughts: The Courage to Let Go
The real challenge facing international schools is not just financial, it is psychological. Schools must be willing to cut their losses when necessary and refocus their resources on what truly matters: sustainable, impactful education. This coming year will test the adaptability of school leadership. Those who recognize and reject the Sunk Cost Fallacy will not only survive the funding crisis but emerge stronger, leaner, and more innovative than ever before.
Will your school have the courage to abandon failing investments, or will it become another cautionary tale of mismanaged priorities?
References
Advantage Communications Group. (2024). Smart IT spending: Debunking the myth IT must be a sunk cost. Retrieved from https://www.advantagecg.com/blog/it-spending-sunk-cost-fallacy
Aimsio. (2019). When to abandon old tech. Retrieved from https://aimsio.com/blog/sunk-cost-old-tech/
Boyd, R., Harris, M., & MacNeill, N. (2023). The sunk cost effects and commitment bias that impact on school decision making. Education Today.
Didau, D. (2025). Why do edtech folk react badly to scepticism? Part 3: Sunk cost fallacy. Retrieved from https://learningspy.co.uk/technology/why-do-edtech-folk-react-badly-to-scepticism-part-3-sunk-cost-fallacy
Kanodia, C., Bushman, R., & Dickhaut, J. (1989). Escalation errors and the sunk cost effect: An explanation based on reputation and information asymmetries. Journal of Accounting Research, 27(1), 59-77.
Miller, D. (2024). Education as a sunk cost: Embrace change or drift behind. Retrieved from https://lawwithmiller.com/blogs/milleriplaw/education-as-a-sunk-cost
Ronayne, D., Sgroi, D., & Tuckwell, A. (2021). Evaluating the sunk cost effect. IZA - Institute of Labor Economics.
New South Wales Department of Education. (n.d.). Reading Recovery evaluation. Centre for Education Statistics and Evaluation. Retrieved February 21, 2025, from https://education.nsw.gov.au/about-us/education-data-and-research/cese/publications/cese-evaluations/reading-recovery-evaluation