A Foundation System and a State System - Private-School Implications on Welfare and Education Expenditure

This paper examines the effects of two different education - financing systems: a foundation system and a state system on the level and distribution of resources devoted to education in the presence of private schools. We use political economy approach where households differ in their level of income, and the central tax rate used to nance education is determined by a majority vote. Our analysis focuses on implications of allowing for a private-school option. To evaluate the importance of private schools we develop a computational model and calibrate it using USA data. The results reveal that the private school option is very important quantitatively in terms of welfare, total resources spent on education and equity.

Autonomy-enhancing paternalism

We present a form of soft paternalism called "autonomy-enhancing paternalism" that seeks to in-crease individual well-being by facilitating the individual ability to make critically reflected, autonomous decisions. The focus of autonomy-enhancing paternalism is on helping individuals to become better decision-makers, rather than on helping them by making better decisions for them. Autonomy-enhancing paternalism acknowledges that behavioral interventions can change the strength of decision-making anomalies over time, and favors those interventions that improve, rather than reduce, individuals ability to make good and unbiased decisions. By this it prevents manipulation of the individual by the soft paternalist, accounts for the heterogeneity of individuals, and counteracts slippery slope arguments by decreasing the probability of future paternalistic interventions. Moreover, autonomy-enhancing paternalism can be defended based on both liberal values and welfare considerations.