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Central versus local education finance: a political economy approach

  • Rainald Borck

    ()

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.

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File URL: http://hdl.handle.net/10.1007/s10797-007-9029-9
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Article provided by Springer in its journal International Tax and Public Finance.

Volume (Year): 15 (2008)
Issue (Month): 3 (June)
Pages: 338-352

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Handle: RePEc:kap:itaxpf:v:15:y:2008:i:3:p:338-352
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  1. Nechyba, Thomas, 2003. "School finance, spatial income segregation, and the nature of communities," Journal of Urban Economics, Elsevier, vol. 54(1), pages 61-88, July.
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  17. Zimmerman, David J, 1992. "Regression toward Mediocrity in Economic Stature," American Economic Review, American Economic Association, vol. 82(3), pages 409-29, June.
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