Abstract:
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In this paper, we study the impact of fiscal and political decentralization on the quality
of public service delivery. While the effect of fiscal decentralization on public services is
a recursive theme, to the best of our knowledge, our study is the first to investigate the
impact of political decentralization. We use educational data as a proxy for the quality of
public services. We use microdata from the PISA test scores from 22 countries and test
for the impact of fiscal and political decentralization on students’ performance. We use
not only general measures of decentralization but, for the first time, also educationspecific decentralization measures. Our results indicate that the impact of fiscal
decentralization on school outcomes is positive. However, the results regarding political
decentralization are more ambiguous. We also observe that the scalar effect of both
political and economic decentralization becomes more evident in large cities.
Keywords: Public services, School outcomes, PISA, fiscal decentralization, political
decentralization |