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

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  • Francesco Cinnirella
  • Ruth Maria Schüler

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.

Suggested Citation

  • Francesco Cinnirella & Ruth Maria Schüler, 2016. "The Cost of Decentralization: Linguistic Polarization and the Provision of Education," CESifo Working Paper Series 5894, CESifo.
    • Handle: RePEc:ces:ceswps:_5894
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    Cited by:

    1. Suesse, Marvin & Wolf, Nikolaus, 2020. "Rural transformation, inequality, and the origins of microfinance," Journal of Development Economics, Elsevier, vol. 143(C).
    2. Francesco Cinnirella & Jochen Streb, 2017. "Religious Tolerance as Engine of Innovation," CESifo Working Paper Series 6797, CESifo.
    3. Seidel, André, 2023. "A global map of amenities: Public goods, ethnic divisions and decentralization," Journal of Development Economics, Elsevier, vol. 164(C).
    4. Sascha O. BECKER & Francesco CINNIRELLA, 2020. "Prussia Disaggregated: The Demography of its Universe of Localities in 1871," JODE - Journal of Demographic Economics, Cambridge University Press, vol. 86(3), pages 259-290, September.
    5. Francisco J. Beltrán Tapia & Alfonso Díez-Minguela & Julio Martinez-Galarraga & Daniel A. Tirado-Fabregat, 2020. "Lordships, state capacity and beyond: literacy rates in mid-nineteenth-century Valencia," Working Papers 0196, European Historical Economics Society (EHES).
    6. Cinnirella, Francesco & Schueler, Ruth, 2018. "Nation building: The role of central spending in education," Explorations in Economic History, Elsevier, vol. 67(C), pages 18-39.
    7. Kersting, Felix & Wohnsiedler, Iris & Wolf, Nikolaus, 2020. "Weber Revisited: The Protestant Ethic and the Spirit of Nationalism," The Journal of Economic History, Cambridge University Press, vol. 80(3), pages 710-745, September.
    8. Walker, Sarah, 2018. "Cultural barriers to market integration: Evidence from 19th century Austria," Journal of Comparative Economics, Elsevier, vol. 46(4), pages 1122-1145.
    9. Bukowski, Paweł, 2018. "How history matters for student performance: lessons from the Partitions of Poland," LSE Research Online Documents on Economics 90643, London School of Economics and Political Science, LSE Library.
    10. Bukowski, Paweł, 2019. "How history matters for student performance. lessons from the Partitions of Poland," Journal of Comparative Economics, Elsevier, vol. 47(1), pages 136-175.
    11. Ruth Maria Schüler, 2018. "Education Economics from a Historical Perspective," ifo Beiträge zur Wirtschaftsforschung, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 78.
    12. Francesco Cinnirella & Jochen Streb, 2017. "The role of human capital and innovation in economic development: evidence from post-Malthusian Prussia," Journal of Economic Growth, Springer, vol. 22(2), pages 193-227, June.
    13. Hao, Yu & Xue, Melanie Meng, 2017. "Friends from afar: The Taiping Rebellion, cultural proximity and primary schooling in the Lower Yangzi, 1850–1949," Explorations in Economic History, Elsevier, vol. 63(C), pages 44-69.
    14. Francisco J. Beltrán Tapia & Alfonso Díez-Minguela & Alicia Gómez-Tello & Julio Martinez-Galarraga & Daniel A. Tirado-Fabregat, 2021. "Structural change and the income of nations," UB School of Economics Working Papers 2021/414, University of Barcelona School of Economics.

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    More about this item

    Keywords

    education; public goods; polarization; decentralization; centralization; Prussia;
    All these keywords.

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • N13 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: Pre-1913
    • N33 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Europe: Pre-1913

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