The Cost of Decentralization: Linguistic Polarization and the Provision of Education

Francesco Cinnirella and Schüler, Ruth M.

No 11274, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: In this paper we argue that different preferences in a decentralized system lead to under provision of public goods. We analyze the provision of public primary education in nineteenth-century Prussia which was characterized by a linguistically polarized society and a decentralized education system. Using unique county-level data on education spending we show that linguistic polarization has a negative impact on local spending. Instrumental variable estimates using distance to the eastern border suggest that the relationship can be causally interpreted. Exploiting a reform of education spending, we show that centralization increases the provision of primary education relatively more in linguistically polarized counties.

Keywords: Education; Public goods; Polarization; Decentralization; Centralization; Prussia (search for similar items in EconPapers)
JEL-codes: H41 H75 I22 N13 N33 (search for similar items in EconPapers)
Date: 2016-05
New Economics Papers: this item is included in nep-edu and nep-ure
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Citations: View citations in EconPapers (22)

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Related works:
Working Paper: The Cost of Decentralization: Linguistic Polarization and the Provision of Education (2016)
Working Paper: The Cost of Decentralization: Linguistic Polarization and the Provision of Education (2016)
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