Working Paper No. 1315

The Role of the Weighted Voting System in Investments in Local Public Education: Evidence from a New Historical Database

Published: January 27, 2020Pages: 29Keywords: Political Institutions; Education; Human Capital; DevelopmentJEL-codes: O15; O43; H75; I25; N34

The Role of the Weighted Voting System in Investments in Local Public Education: Evidence from a New Historical Database Erik Lindgren, Per Pettersson-Lidbom and Björn Tyrefors


In this paper, we analyze how a weighted voting system introduced in 1862, which shifted the distribution of political power from landowners to industrialists at local town meetings, affected investments in local public education. We use an event study design based on a newly constructed panel data set with annual observations of nearly 2,200 Swedish local governments over 28 years, i.e., more than 60,000 observations.

Most importantly, there is no pre-trend in educational spending in our event study but rather a sharp change in the dynamic treatment effects exactly at the date when the treatment occurs, i.e., when industrialists receive more political power at town meetings. The estimated cumulative treatment effect is also economically substantial.

For example, per capita spending on education increased by approximately 37% within 6 years in local governments where industrialists came to political power. Our findings are therefore consistent with the idea that political institutions are a key determinant of human capital accumulation and long-run economic development.

 


Reference:

Lindgren, Erik, Per Pettersson-Lidbom and Björn Tyrefors (2020), "The Role of the Weighted Voting System in Investments in Local Public Education: Evidence from a New Historical Database​". IFN Working Paper No. 1315. Stockholm: Research Institute of Industrial Economics (IFN).

Björn Tyrefors

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Ph: +46 8 665 4521
Mob: +46 704678003
bjorn.tyrefors@ifn.se

Per Pettersson-Lidbom

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Ph: +46 8 16 12 39
pp@ne.su.se

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