Friday, March 14, 2014
Calvert (Omni Shoreham)
There is a large degree of variation between OECD countries with regard to the public/private division of labor in education financing. How can this variation be explained? And why are education regimes with a high share of private financing politically sustainable over the long term? This paper argues that electoral institutions were important historically in shaping the partisan coalitions that established distinct financing regimes for education. Following the work by Iversen and Soskice, we argue that in systems based on proportional representation (PR), the median voter aligns with the party of the low-income classes in order to push for public financing of education. In majoritarian systems, middle class voters enter a politico-economic coalition with the upper income class voters, lobbying for private financing in education since this slows down the process of educational expansion. These hypotheses are tested (and confirmed) in an analysis of aggregate-level data for OECD countries. In a second step, we analyze how existing institutions feedback onto the level of preferences and attitudes. The paper shows that the prevailing division of labor in education financing creates positive feedback effects in the sense that public support for more government spending on education is lower in systems with extensive private financing. We also find that extensive private financing lowers the support for government aid to students from low-income families. The notion of positive feedback therefore explains why education financing regimes are politically sustainable in the long term.
