Fiscal decentralisation, private school funding, and students’ achievements. a tale from two roman catholic countries

Abstract

The objective of the paper is to study the disciplining role of both market forces and regional governments own resources in the provision of educational services. The historical evolution of school regulation in Italy and Spain (in particular regarding the funding of private schools run by Roman Catholic Church, and the role of regional governments financing education) created different institutions in terms of both dimensions, private funds and regional governments funds. We take advantage of these institutional diversities to estimate the disciplining role of different sources of funds in the context of educational production function using PISA data. Our results provide support to these accountability drivers. Moreover, we find evidence on the role played by a national standardised test in providing adequate incentives to improve schools’ performance.