The politics of opting out: explaining educational financing and popular support for public spending

In this paper, we address two empirical puzzles: Why are cross-country differences inthedivisionoflabourbetweenpublicandprivateeducationfundingsolargeand whyaretheypoliticallysustainableinthelongterm?Wearguethatelectoralinstitutions play a crucial role in shaping politico-economic distributive coalitions that affected the original division of labour in education financing. In proportional representationsystems,thelowerandmiddleclassesformedacoalitionsupportingthe establishment of a system with a large share of public funding. In majoritarian systems, in contrast, the middle class voters aligned with the upper income class and supported private education spending instead. Once established, institutional arrangements create feedback effects on the micro-level of attitudes, reinforcing politicalsupportevenamonguppermiddleclassesinpublicsystems.Thesehypotheses are tested empirically both on the micro level of preferences as well as on the macrolevelwith aggregatedataandsurveydatafromtheISSPfor20Organization for Economic Co-operation and Development countries.