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Assessing the Effects of Fiscal Decentralization on the Education Sector: A Cross-Country Analysis

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  • Iftikhar Ahmad

    () (Assistant Professor, Pakistan Institute of Development Economics, Islamabad, Pakistan)

Abstract

This paper examines the effects of fiscal decentralization on the education sector for a sample of 62 countries. The results suggest that different sources of fiscal decentralization have distinct effects on education expenditure and quality. While subnational governments that are financed through own-tax revenues are more likely to increase the funds allocated to education, they also seem less concerned with maintaining teaching quality. This study provides evidence that decentralized structures cater better to local social needs. Fiscal decentralization is, therefore, an important policy instrument for achieving social goals.

Suggested Citation

  • Iftikhar Ahmad, 2016. "Assessing the Effects of Fiscal Decentralization on the Education Sector: A Cross-Country Analysis," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 21(2), pages 53-96, July-Dec.
  • Handle: RePEc:lje:journl:v:21:y:2016:i:2:p:53-96
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    File URL: http://lahoreschoolofeconomics.edu.pk/EconomicsJournal/Journals/Volume%2021/Issue%202/03%20Ahmad.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Fiscal decentralization; education expenditure; teaching quality; panel data.;

    JEL classification:

    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • H40 - Public Economics - - Publicly Provided Goods - - - General
    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education

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