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Effects of decentralization on school resources


  • Ahlin, Åsa

    (Uppsala University)

  • Mörk, Eva

    () (IFAU - Institute for Labour Market Policy Evaluation)


Sweden has undertaken major national reforms of its schooling sector which, consequently, has been classified as one of the most decentralized ones in the OECD. This paper investigates the extent to which local tax base, grants, preferences and structural characteristics affected local schooling resources as decentralization took place. We use municipal data for the period 1989–95 which covers the key reform years without confounding decentralization with institutional changes after 1995. The main arguments against decentralization are not supported by our findings. First, school spending as well as teacher density is found to be more equally distributed across municipalities following decentralization. Second, local tax capacity does not influence schooling resources more in the decentralized regime than in the centralized regime. We also find that the form in which grants are distributed matter: Targeted grants have a significant positive impact on resources while general grants have not.

Suggested Citation

  • Ahlin, Åsa & Mörk, Eva, 2005. "Effects of decentralization on school resources," Working Paper Series 2005:5, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  • Handle: RePEc:hhs:ifauwp:2005_005

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    References listed on IDEAS

    1. Hanna Ågren & Matz Dahlberg & Eva Mörk, 2007. "Do politicians’ preferences correspond to those of the voters? An investigation of political representation," Public Choice, Springer, vol. 130(1), pages 137-162, January.
    2. Ahlin, Åsa, 2003. "Does School Competition Matter? Effects of a Large-Scale School Choice Reform on Student Performance," Working Paper Series 2003:2, Uppsala University, Department of Economics.
    3. Dahlberg, Matz & Mörk, Eva, 2004. "Public employment and the double role of bureaucrats," Working Paper Series 2004:11, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    4. Åsa Ahlin & Eva Johansson, 2001. "Individual Demand for Local Public Schooling: Evidence from Swedish Survey Data," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 8(4), pages 331-351, August.
    5. Silva, Fabio & Sonstelie, Jon, 1995. "Did Serrano Cause a Decline in School Spending," National Tax Journal, National Tax Association, vol. 48(2), pages 199-215, June.
    6. David Card & Abigail A. Payne, 1997. "School Finance Reform, the Distribution of School Spending, and the Distribution of SAT Scores," Working Papers 766, Princeton University, Department of Economics, Industrial Relations Section..
    7. Mills, Jeffrey A & Zandvakili, Sourushe, 1997. "Statistical Inference via Bootstrapping for Measures of Inequality," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 12(2), pages 133-150, March-Apr.
    8. Caroline M. Hoxby, 2001. "All School Finance Equalizations are Not Created Equal," The Quarterly Journal of Economics, Oxford University Press, vol. 116(4), pages 1189-1231.
    9. Robert Manwaring & Steven Sheffrin, 1997. "Litigation, School Finance Reform, and Aggregate Educational Spending," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 4(2), pages 107-127, May.
    10. Mörk, Eva & Ahlin, Åsa, 2007. "Effects of decentralization on school resources: Sweden 1989-2002," Working Paper Series 2007:9, Uppsala University, Department of Economics.
    11. Silva, Fabio & Sonstelie, Jon, 1995. "Did Serrano Cause a Decline in School Spending," National Tax Journal, National Tax Association, vol. 48(2), pages 199-215, June.
    12. Bergstrom, Pal & Dahlberg, Matz & Mork, Eva, 2004. "The effects of grants and wages on municipal labour demand," Labour Economics, Elsevier, vol. 11(3), pages 315-334, June.
    13. Svaleryd, Helena, 2002. "Femal Representation - Is it Important for Policy Decisions?," Research Papers in Economics 2002:7, Stockholm University, Department of Economics.
    14. Murray, Sheila E & Evans, William N & Schwab, Robert M, 1998. "Education-Finance Reform and the Distribution of Education Resources," American Economic Review, American Economic Association, vol. 88(4), pages 789-812, September.
    15. Winkler, Donald R. & Rounds, Taryn, 1996. "Municipal and private sector response to decentralization and school choice," Economics of Education Review, Elsevier, vol. 15(4), pages 365-376, October.
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    Cited by:

    1. Verena Wondratschek & Karin Edmark & Markus Frolich, 2013. "The Short- and Long-term Effects of School Choice on Student Outcomes - Evidence from a School Choice Reform in Sweden," Annals of Economics and Statistics, GENES, issue 111-112, pages 71-101.
    2. Martin Sˆderstrˆm & Roope Uusitalo, 2010. "School Choice and Segregation: Evidence from an Admission Reform," Scandinavian Journal of Economics, Wiley Blackwell, vol. 112(1), pages 55-76, March.
    3. Borge, Lars-Erik & Brueckner, Jan K. & Rattsø, Jorn, 2014. "Partial fiscal decentralization and demand responsiveness of the local public sector: Theory and evidence from Norway," Journal of Urban Economics, Elsevier, vol. 80(C), pages 153-163.
    4. Saastamoinen, Antti & Kortelainen, Mika, 2018. "When does money stick in education? Evidence from a kinked grant rule," Working Papers 102, VATT Institute for Economic Research.
    5. Hägglund, Pathric, 2006. "Are there pre-programme effects of Swedish active labour market policies? Evidence from three randomised experiments," Working Paper Series 2006:2, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    6. Andreas Bergh, 2014. "Sweden and the Revival of the Capitalist Welfare State," Books, Edward Elgar Publishing, number 15717.

    More about this item


    School resources; school finance reform; decentralization;

    JEL classification:

    • H40 - Public Economics - - Publicly Provided Goods - - - General
    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General

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