Decentralised funding and inequality in education

This chapter explores the link between the decentralisation of education funding to the local level and inequality in outcomes. In most countries, autonomous local taxes fund, at most, a small share of education expenses. They play a significant role, however, in a few Nordic countries and in Switzerland. The economic literature suggests that local funding makes educational systems more efficient at the expense of equity. However, inequality is not systematically larger in more decentralised countries. This finding does not appear to be driven by differences in socio-economic homogeneity, but rather by a range of policies that mitigate or offset any adverse impact. Some of these policies may still bear an equityefficiency trade-off.