Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/141871
Authors: 
Cinnirella, Francesco
Schueler, Ruth Maria
Year of Publication: 
2016
Series/Report no.: 
CESifo Working Paper 5894
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.
Subjects: 
education
public goods
polarization
decentralization
centralization
Prussia
JEL: 
H41
H75
I22
N13
N33
Document Type: 
Working Paper

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