Abstract
The decentralization of education services from the federal government to the provincial governments was an important component of the major fiscal and structural reforms undertaken in Argentina in the early 1990's. The theoretical literature is not conclusive about the absolute superiority of either centralization or decentralization in the provision of public services. In this paper, we evaluate empirically the effect of the decentralization of secondary schools on education quality. Our results suggest that, on average, decentralization improved the performance of public school students in test scores. We also assess whether the effect of decentralization depends on province characteristics. We find that the higher the provincial fiscal deficits, the smaller the positive impact of decentralization.
Highlights
Decentralization is a major component of current institutional innovation throughout the world
We find a negative and statistically significant effect of Cen on Score, that is, we find that school decentralization improves the performance of public school students
Conclusions there is a wide literature that outlines the pros and cons of decentralization, there is no evidence on the causal effect of school decentralization on education quality
Summary
Decentralization is a major component of current institutional innovation throughout the world. In Latin America, most countries implemented decentralization policies in the recent past after a long tradition of centralized government (Burki, Perry, and Dillinger, 1999).. An important piece of the structural reforms undertaken in Argentina in the early 1990’s was the decentralization of education services from the federal government to the provincial governments. The main argument in support of decentralization policies is to bring decisions closer to the people. Information asymmetries, agency costs and problems of collective decision can be alleviated through decentralization. Decentralization can worsen the provision of public goods in the presence of positive spillovers, lack of technical capabilities by local governments, or capture of low-level administrations by local elites
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