Investigating the effect of financial decentralization on the efficiency of educational services in the provinces of Iran during the years 1385-1397: Spatial econometrics approach

Abstract

Implementing financial decentralization with the aim of improving management processes and transferring resource management and spending from central government to local governments is one of the factors in improving the efficiency of public services, including educational services. Accordingly, the purpose of this study is to investigate the effect of financial decentralization indicators on the efficiency of educational services in the provinces of Iran by spatial econometric method during the years 1397-1385. The present study is a two-stage approach: in the first stage, performance coefficients in the education sector are estimated through stochastic border analysis. In the second stage, spatial methodology is used to investigate the effect of financial decentralization on the estimated coefficients of efficiency. Findings show that the effect of expenditure decentralization on the efficiency of educational services is positive and significant. Also, the research findings show that the effect of income decentralization on the efficiency of educational services is not significant. The effect of per capita income and the ratio of urbanization to the efficiency of educational services is positive and significant. Finally, the effect of Gini coefficient as an indicator indicates the distribution of income on the efficiency of educational services is negative and significant. The virtual variable entered in the model is not significant for separating oil and non-oil revenue provinces.

Keywords

• financial decentralization
• efficiency of educational services
• spatial econometrics