Central versus Local Education Finance: A Political Economy Approach

Rainald Borck

No 565, Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research

Abstract: This paper models voters' preferences over central versus local education policies when there are private alternatives. Education is financed by income taxes and individuals are mobile between communities. Public education levels are chosen by majority vote. Contrary to conventional wisdom, centralisation may benefit the rich and poor, while the middle class prefer decentralised education. The model is also extended to include peer effects. Peer effects increase the support for central school finance, even in the community with good public schools.

Keywords: Education; centralisation; private school; majority voting (search for similar items in EconPapers)
JEL-codes: D72 H72 I22 (search for similar items in EconPapers)
Pages: 19 p.
Date: 2006
New Economics Papers: this item is included in nep-edu and nep-ure
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Citations: View citations in EconPapers (4)

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Journal Article: Central versus local education finance: a political economy approach (2008)
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