Date Added: Mar 2010
This paper explains how state governments got the funds to pay for education and examines the incentives that politicians had to spend on education between 1889 to 1930. The findings are threefold. First, they show that the Constitution of 1891, which decentralized education and allowed states to collect export taxes to finance expenditures, rendered states with higher windfall tax revenues from the export of commodities to spend more on education per capita. Second, they prove that colonial institutions constrained the financing of education, but that nonetheless the net effect of the increase in commodity exports always led to a net increase in education expenditures.