Private funding in public education: which values underlie the decision-making process?

Fiscal decentralisation in education shifts financial responsibilities from the central to the local government, exacerbating its complexity due to local involvement in the decision-making process. Competing values are key to this complexity (e.g. equity/liberty). The objective of this study is twofold: First, we examine the disparities in the private funding of public education. Second, we analyse the values that underlie the policy-making process of the local authorities in Israel. Using nationwide administrative data and interviews with local policymakers, we found that affluent, centrally located authorities allocate more resources, prioritising choice and excellence, whereas less affluent authorities emphasise equity and need-based allocation. Our findings contribute to the framework by adding innovation as a more contemporary value that underlies the decision-making process. Our study suggests that fiscal decentralisation may impede educational equity due to competing values, thus underscoring the need for reforming central education finance policy by prioritising equitable education.