The paper assesses the efficiency of public expenditures in decreasing the unequal distribution of education in developing countries over the period 1980–2010. For this purpose, we use partial frontier estimator to compute output and input efficiency scores. Moreover, we analyze the determinants of education output efficiency by using Exponential Fractional Regression Models (EFRM). The results show that on average, developing countries can reduce their education inequality by 30% without changing their public expenditures on education. Developing countries improved their output efficiency over the study period. However, their input efficiency has decreased relatively slightly since 2005. The results also show that logarithm of GDP and its square, urbanization, government stability and democracy are the main determinants of education output efficiency for both logit and Cloglog specifications.