Poverty and the Political Economy of Public Education Spending: Evidence From Brazil

Abstract

A large body of literature has emphasized the elite capture of democratic institutions as the explanation for the low levels of spending on public education in many low‐income democracies. This paper provides an alternative to that longstanding hypothesis. Motivated by new cross‐country facts and evidence from Brazilian municipalities, we hypothesize that many democratic developing countries might invest less in public education spending because poor decisive voters prefer the government to allocate resources elsewhere. One possible explanation is that low‐income voters could instead favor redistributive programs that increase their incomes in the short run, such as cash transfers. To test for this possibility, we design and implement an experimental survey and an incentivized choice experiment in Brazil. The findings from both interventions support our hypothesis.

Tax Me, but Spend Wisely? Sources of Public Finance and Government Accountability

“…This would lead to tax revenues being spent more on education infrastructure if taxpayers favor education spending more than (poorer) non taxpayers, in line with evidence in Bursztyn (2013) that middle-income individuals demand more education spending than low-income individuals in Brazil. This qualifies the external validity of the results in this paper: they indicate that increases in tax revenues due to improvements in tax capacity are spent better than increases in non-tax revenues.…”

Education and Military Rivalry

“…In particular, Mulligan, Gil, and Sala-i-Martin (2004) present cross-country evidence indicating that more democratic political institutions do not seem to correlate with higher levels of social expenditures and, in particular, higher public education spending. More recently, Bursztyn (2011) shows that poor voters in Brazil might prefer the government to allocate resources to redistributive policies, yielding immediate income increases (such as cash transfers), instead of allocating resources to public primary education. Also related to our analysis is the work by Bourguignon and Verdier (2000), who develop a model to explain why the ruling class may sometimes decide to invest in education even though schooling enhances political participation.…”

“…Among the 53 countries in this table, it is only in two countries where a democratic transition occurs before the rise in education. Most often, the democratic transition instead takes place after the educational reform period 13  10 The educational reform period in Table 1 is defined as the period during which the change in primary enrollment rate was the greatest in percentage terms, not in absolute value. 11 See the dataset http://www.systemicpeace.org/polity/polity4.htm.…”

“…11 See the dataset http://www.systemicpeace.org/polity/polity4.htm. 12 http://www.correlatesofwar.org/ 13 See Appendix B for details about the dates of wars and democratization, as well as the availability of data on primary enrollment per country.…”

Shocking Behavior: Random Wealth in Antebellum Georgia and Human Capital Across Generations *

“… 34 Jensen (2010) and Bursztyn (2013) provide examples from modern developing economies in which people are either unaware of returns to education or simply prefer that resources be spent in other ways. …”