n.a.
The determinants of school spending are investigated using a disaggregated demand model augmented to include political factors. High school spending by county governments is disaggregated to identify the sources of variation in teacher–student ratio, non-wage spending per student, and student enrollment. The disaggregation throws new light on the role of cost factors in explaining the expansion of educational services. High school spending is shown to be highly inelastic to county revenue and major cost factors. The spending decision is analyzed as an example of the common pool problem in distributive politics. Schools offer benefits to each municipality, and municipalities fight for new schools since the costs are shared. The political decision implies a balancing between this spending pressure and the coordinated interests of the county. Political strength, measured by the party fragmentation of the council, is shown to hold down costs and allow for more student enrollment. On the other hand, the spending pressure measured by the average size of the municipalities in the county, influences all three spending components, and the effects depend on the political strength.
Between 1971 and 1996 opponents of local funding for public schools successfully challenged the constitutionality of school-finance systems in sixteen states. Using the variation across states in the timing of these cases the authors investigate the impact of reform on the distribution of school resources. Their results suggest that court-ordered finance reform reduced within-state inequality in spending by 19 to 34 percent. Successful litigation reduced inequality by raising spending in the poorest districts while leaving spending in the richest districts unchanged, thereby increasing aggregate spending on education. Reform led states to fund additional spending through higher state taxes.
Allocation of resources in the local public sector involves economic and political forces. In many U.S. states the bulk of spending on public education is subject to referendum. We link spending proposals to referendum outcomes. Our model makes use of voting data to shed light on the extent to which referenda constrain spending. We use data from school budget referenda in 544 New York school districts for the 1975–1976 school year. Our econometric results and simulations based on them reveal considerable sensitivity of spending to the form of the state grants-in-aid structure, as well as to the referendum requirement. In addition, large school districts appear to behave more like ‘budget maximizers’ than do small districts, where proposals appear more in line with ‘median voter’ demands.
© 2004 European Expert Network on Economics of Education This e-mail address is protected against spambots. Please activate JavaScript in order to see them. | Home | Site Map | Contacts | Impressum | Printversion
