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Politics and preschool : the political economy of investment in pre-primary education

  • Kosec, Katrina
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    What drives governments with similar revenues to publicly provide very different amounts of goods for which private substitutes are available? Key examples are education and health care. This paper compares spending by Brazilian municipalities on pre-primary education -- a good that is also provided privately -- with spending on public infrastructure like parks and roads, which lacks private substitutes. Panel data from 1995-2008 reveal how the distribution of income affects public investment. Revenue is endogenous to investment outcomes, and the analysis addresses this problem by exploiting a 1998, nationwide education finance reform and several revisions to the policy. The author constructs a variable that captures exogenous variation in revenue generated by nonlinearities of the law to instrument for observed revenue. Municipalities with higher median income and more inequality are less likely to allocate revenue to education or to expand pre-primary enrollment. They are more likely to allocate revenue to public infrastructure. There is suggestive evidence that this occurs for two reasons, hypothesized in two separate literatures. In rich and unequal municipalities, fewer total people support public education spending (the collective choice channel), and also, any given poor person wanting public education has less influence over policymakers there (the political power channel).

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    Paper provided by The World Bank in its series Policy Research Working Paper Series with number 5647.

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    Date of creation: 01 May 2011
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    Handle: RePEc:wbk:wbrwps:5647
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    2. Anderson, Michael L., 2008. "Multiple Inference and Gender Differences in the Effects of Early Intervention: A Reevaluation of the Abecedarian, Perry Preschool, and Early Training Projects," Journal of the American Statistical Association, American Statistical Association, vol. 103(484), pages 1481-1495.
    3. Fernanda Estevan, 2009. "The quality of public education and private school enrollment: an assessment using Brazilian data," Boston University - Department of Economics - The Institute for Economic Development Working Papers Series dp-185, Boston University - Department of Economics.
    4. Raj Chetty & John N. Friedman & Nathaniel Hilger & Emmanuel Saez & Diane Whitmore Schanzenbach & Danny Yagan, 2010. "How Does Your Kindergarten Classroom Affect Your Earnings? Evidence From Project STAR," NBER Working Papers 16381, National Bureau of Economic Research, Inc.
    5. Samuel Berlinski & Sebastian Galiani & Paul Gertler, 2006. "The effect of pre-primary education on primary school performance," IFS Working Papers W06/04, Institute for Fiscal Studies.
    6. Mansuri, Ghazala & Rao, Vijayendra, 2004. "Community-based (and driven) development : A critical review," Policy Research Working Paper Series 3209, The World Bank.
    7. Francisco H.G. Ferreira & Peter Lanjouw & Marcelo Neri, 2001. "A New Poverty Profile For Brazil Using PPV, PNAD And Census Data," Anais do XXIX Encontro Nacional de Economia [Proceedings of the 29th Brazilian Economics Meeting] 100, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics].
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    9. Abhijit Banerjee & Rohini Somanathan, 2004. "The political economy of public goods: Some evidence from India," Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers 04-17, Indian Statistical Institute, New Delhi, India.
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    14. Claudio Ferraz & Frederico Finan, 2009. "Electoral Accountability and Corruption: Evidence from the Audits of Local Governments," NBER Working Papers 14937, National Bureau of Economic Research, Inc.
    15. Epple, Dennis & Romano, Richard E., 1996. "Ends against the middle: Determining public service provision when there are private alternatives," Journal of Public Economics, Elsevier, vol. 62(3), pages 297-325, November.
    16. Elizabeth U. Cascio, 2009. "Do Investments in Universal Early Education Pay Off? Long-term Effects of Introducing Kindergartens into Public Schools," NBER Working Papers 14951, National Bureau of Economic Research, Inc.
    17. Richard Blundell & Alan Duncan & Costas Meghir, 1995. "Estimating labour supply responses using tax reforms," IFS Working Papers W95/07, Institute for Fiscal Studies.
    18. Pranab Bardhan & Dilip Mookherjee, 2003. "Pro-Poor Targeting and Accountability of Local Governments in West Bengal," Boston University - Department of Economics - The Institute for Economic Development Working Papers Series dp-138, Boston University - Department of Economics.
    19. Fitzpatrick Maria D, 2008. "Starting School at Four: The Effect of Universal Pre-Kindergarten on Children's Academic Achievement," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 8(1), pages 1-40, November.
    20. Musacchio, Aldo & Fritscher, André Martínez & Viarengo, Martina, 2014. "Colonial Institutions, Trade Shocks, and the Diffusion of Elementary Education in Brazil, 1889–1930," The Journal of Economic History, Cambridge University Press, vol. 74(03), pages 730-766, September.
    21. Catalina Gutiérrez & Ryuichi Tanaka, 2009. "Inequality and education decisions in developing countries," Journal of Economic Inequality, Springer, vol. 7(1), pages 55-81, March.
    22. Keefer, Philip & Khemani, Stuti, 2003. "Democracy, public expenditures, and the poor," Policy Research Working Paper Series 3164, The World Bank.
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