School Funding

Richard P. Phelps

In most jurisdictions, formal schooling does not operate within the market economy. Rather, it is provided, directly or indirectly, by government at negligible direct cost to students and parents. How this service is funded is largely a political decision. Political responsibility for school systems tends to reside primarily with the level of government also primarily responsible for their funding. Countries with national education systems (e.g., France, Finland) fund schools primarily from national revenues; those with state or provincial systems (e.g., Germany, Australia) with a combination of national and state or provincial revenues; and those with local school districts (the United States, Switzerland) with a combination of national, state or provincial, and local revenues. Local funding can be popular when it allows more local control of schools. But, the smaller the jurisdiction responsible for funding schools, the more likely there are to be equity concerns. Local jurisdictions with a strong tax ...

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