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

Francesco Cinnirella and Ruth Maria Schüler

No 5894, CESifo Working Paper Series from CESifo

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
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (23)

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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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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_5894

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