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Discussion Paper Details

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Title: The Cost of Decentralization: Linguistic Polarization and the Provision of Education

Author(s): Francesco Cinnirella and Ruth M. Schueler

Publication Date: May 2016

Keyword(s): Centralization, Decentralization, education, Polarization, Prussia and Public Goods

Programme Area(s): Economic History

Abstract: In this paper we argue that different preferences in a decentralized system lead to under provision of public goods. We analyze the provision of public primary education in nineteenth-century Prussia which was characterized by a linguistically polarized society and a decentralized education system. Using unique county-level data on education spending we show that linguistic polarization has a negative impact on local spending. Instrumental variable estimates using distance to the eastern border suggest that the relationship can be causally interpreted. Exploiting a reform of education spending, we show that centralization increases the provision of primary education relatively more in linguistically polarized counties.

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Bibliographic Reference

Cinnirella, F and Schueler, R. 2016. 'The Cost of Decentralization: Linguistic Polarization and the Provision of Education'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=11274