This paper analyzes some of the problems that arise in decentralizing education to the private sector. We concentrate on the difficulties that result from the heterogeneity of students and competition among schools in a locational setting. We analyze two main issues, the resources expended by...

This paper discusses how decentralized countries can achieve sound fiscal relations between the central government and lower government levels. The concepts of 'vertical gap' and 'vertical balance' provide an analytical framework for identifying and addressing key challenges. These concepts can...