The Importance of Institutional Arrangements for Development: A Study of the Relationship between Decentralized Governance and the Provision of Public Education

Abstract

This dissertation explores the possibility of improving the provision of public education through decentralizing decision-making, taxation and public spending to the level of regional governments. It develops a theoretical framework to analyze the impact of fiscal decentralization on the provision of public education and uses quantitative analysis to empirically evaluate the impact. The effects of other major socio-economic, political and demographic variables on public education spending and education outcomes were also examined. The analysis using cross-sectional time series data for 33 developed and transitional countries over the 1997-2006 period revealed that institutional arrangements in the form of decentralization of governance to the regional level have the potential to significantly improve public education.