THE RELATIVE EFFICIENCY OF PRIVATE AND PUBLIC SCHOOLS IN DEVELOPING COUNTRIES

Aside from revenue mobilization, one of the arguments for allowingthe private sector to assume a larger role in the provisionof education is that it would increase efficiency, as administratorsbecome more responsive to the needs of students and their parents.But what is the evidence? Based on case studies that compareprivate and public secondary education in Colombia, the DominicanRepublic, the Philippines, Tanzania, and Thailand, private schoolstudents generally outperform public school students on standardizedmath and language tests. This finding holds even after holdingconstant for the fact that, on average, private school studentsin these countries come from more advantaged backgrounds thantheir public. school counterparts. In addition, preliminaryevidence shows that the unit costs of private schools are lowerthan those of public schools. Although these results cannot,in themselves, be used as arguments for massive privatization,they indicate that governments should reconsider policies thatrestrain private sector participation in education. Furtherresearch is needed to determine whether some teaching and administrativepractices in private schools are applicable to public schools.      

Corporate Lobbying in Private Accounting Standard Setting: Does the IASB have to Reckon with National Differences?

This paper explores whether the attitude of preparers towards lobbying to a private accounting standard setter is different depending on the regulatory background of the preparers' home country. Prior literature examined the preparers' incentives and characteristics as drivers to participate in the due process of international accounting standard setting, but it did not investigate the impact of the preparers' national regulatory background on participation. As a result of the acceptance of the International Financial Reporting Standards promulgated by the International Accounting Standards Board (IASB) in different countries, preparers who are traditionally accustomed with an accounting standard setting process initiated by governments with few opportunities for formal participation, are now able to participate in a private accounting standard setting process characterised by several possibilities for participation. Comparing survey evidence of Belgian preparers with existing survey evidence of UK preparers, we notice that the participation methods used, the perception on the effectiveness of the participation methods and the reasons for non-participation differ across both groups of preparers. This finding suggests that the national regulatory background of the preparers may affect the behaviour of preparers in their decision to participate in private accounting standard setting.     

The effect of seasonal variations in auditor workload on local government audit fees and audit delay

Prior studies of government audit fees and audit delay (elapsed time from fiscal year end (FYE) to date of the audit report) employ a dichotomous variable to control for seasonality. However, a single variable does not appear to fully capture the effects of seasonality on audit fees or audit delay in the US local government sector. We compare the effects of FYEs commonly observed by US local governments (i.e., June 30, September 30, and December 31) on the audit fees and audit delay of 302 cities and counties for fiscal 1993. Our findings indicate that governments with June FYEs incur lower fees than do governments with either September or December FYEs. We also find that June and December governments sustain equivalent (and maximal) audit delay, and that September governments experience minimal delay. The results show that, in terms of fees and delay, December 31 is the least desirable of the FYE dates commonly found in the US local government arena. Our findings further suggest that audit fees may influence audit delay, when considered in a seasonal context.     

Monetary policy,government control and capital investment: Evidence from China

This study examines how the relationships between local governments and local enterprises moderate the effect of targeted monetary policies through different action-propagating mechanisms. First, we investigate the impact of monetary policies on enterprise investment in areas with different institutional environments. Second, we investigate the impact of monetary policies on state-owned enterprises (SOEs) with different property rights structures. Third, we examine how political connections can influence the action-propagating mechanism of monetary policies. We conclude that in China monetary policies have different effects on SOEs and on private enterprises with or without political connections. Specifically, local government interventions can significantly weaken and distort the effects of monetary policies, such that the intended reduction in investment is noticeably alleviated for SOEs and private enterprises with close links to local governments.     

Measuring audit quality of local governments in England and Wales

The purpose of this paper is to model and test the audit quality provided to local governments in England and Wales. A key question is: are there major differences in audit quality provided? The Audit Commission, a national public body under Parliament, regulates the audits. It sets audit standards, appoints the auditors, and (although each auditor and client local government set the specific audit fee for that client) it establishes a formula to determine standard audit fees. The Audit Commission also conducts an annual review of the audit quality provided by the selected auditors, as well as a survey of client satisfaction. The majority of audits are conducted by District Auditors (public sector employees of the Audit Commission). About a quarter of local governments are audited by one of six private sector auditors (including three of the Big 4). Actual results indicate that audit quality differences are associated with the number of governmental audit clients and local government type. Generally, there were modest quality differences by auditor category.     

Funding and School Accountability: The Importance of Private and Decentralised Public Funding for Pupil Attainment

We discuss the issue of how schools should be financed, concentrating on the role of private funding and public funding via subnational governments as accountability mechanisms in the provision of educational services. The historical evolution of school regulation in Italy and Spain has created differences in the percentage of pupils who attend private schools, the percentage of private school funding coming from public and private sources and the percentage of public school funding that comes from central or local government sources. We take advantage of these institutional diversities rooted in history to estimate the disciplining role of these different sources of funding in the context of an educational production function using Programme for International Student Assessment (PISA) data. Our results provide support to both accountability mechanisms and point to the presence of an important interplay between them.     

Russian Home-Building in Transition

Since 1991, the reform governments of the Russian Federation and its constituent republics have allowed and, in varying degrees, encouraged the privatization of state-owned housing and new residential construction by private firms for private ownership. This study describes the emergence of private home-building enterprises engaged in two types of projects: (1) The completion and sale of multifamily dwellings started during the socialist regime and (2) development and marketing of single-family luxury housing on land at the urban fringe. It is based on surveys of private housing developers and secondary housing markets in seven cities of the Russian Federation, including Moscow and St. Petersburg. The surveys were conducted by Russian consultants in 1993 under the sponsorship of the U.S. Agency for International Development and the World Bank. At the time of the surveys, not all aspects of real estate development were yet conducted under private institutions. The developers'; most important functions were arranging project financing from private sources (own funds, homebuyers'; prepayments, bank loans) and marketing the dwellings, usually prior to completion. Municipal governments still controlled land allocations for new housing. Municipal enterprises were also responsible for providing access roads and utility connections, using their strategic position to exact fees, which account for a fourth to two-thirds of the total development costs. In Moscow and St. Petersburg, a substantial fraction of the completed dwellings were contractually assigned to the municipality for disposition and, in all places studied, additional units were sold to the developers'; employees, suppliers, and city officials at a discount. Conditions that are necessary for further development of market-based home-building include (1) development of more market-oriented land policies by municipalities, (2) development of more rational and feasible fees charged to developers by cities, (3) modernization of utilities in cities, and (4) increasing developers'; understanding of importance of market studies.     

税费替代:增值税减税、非税收入征管与企业投资

通过减税促进企业投资和提振宏观经济是近年来中国税收制度改革的重要目标,但减税政策的实际效果却存在争议。本文利用2009年增值税转型改革,研究了减税对地方政府税费收入和企业非税负担的影响,从税费替代的角度揭示非税负担变动如何影响企业固定资产投资。研究发现:(1)增值税转型在减税的同时提高了地方政府非税收入并加重了企业非税负担,地方财政收入受增值税转型冲击越大,企业非税负担上升越明显。(2)上述应主要体现在小型、微型和民营企业上,大中型、非民营企业的非税负担未发生明显变化。(3)非税负担上升会显著抑制小型、微型和民营企业的固定资产投资,促使小型微型和民营企业通过持有更多现金和减少流动性负债来应对税费负担不确定性。本文有助于理解减税政策对小型微型和民营企业非税负担的溢出效应及其影响,为通过减税降费促进投资和提振经济提供经验支撑。     

Can Private School Subsidies Increase Enrollment for the Poor? The Quetta Urban Fellowship Program

This study evaluates a program designed to stimulate girls'schooling through the creation of private girls' schools inpoor urban neighborhoods of Quetta, Pakistan. Enrollment growthin these randomly selected neighborhoods is compared to enrollmentgrowth in otherwise similar neighborhoods that were randomlyassigned to a control group. The analysis indicates that theprogram increased girls' enrollment around 33 percentage points.Boys' enrollment rose as well, partly because boys were allowedto attend the new schools and partly because parents would notsend their girls to school without also educating their boys.This outcome suggests that programs targeted at girls can alsoinduce parents to invest more in their boys. The success ofthe program varied across neighborhoods, although success wasnot clearly related to the relative wealth of a neighborhoodor to parents' level of education. Thus the program offers tremendouspromise for increasing enrollment rates in other poor urbanareas.     

私人信息、公开信息与中国的金融市场参与

金融市场的发展能够为长期的经济增长提供动力,家庭对金融市场的有限参与是制约金融发展的重要因素之一。2015年中国绝大多数家庭未能参与金融市场。本文采用倾向得分匹配方法考察了私人信息和公开信息对家庭金融市场参与的影响以及两者的影响差异。基于2015年CGSS数据集的分析结果显示,家庭拥有金融市场私人信息或者能够充分获取公开信息都会显著提升其参与金融市场的概率。家庭获取公开信息的渠道越广泛,经由各种渠道获取的公开信息越多,参与金融市场的概率就越高。总体而言,充分获取公开信息比拥有私人信息对家庭金融市场参与的影响更大,这是源于个体对两种信息质量预期的不同。公开信息具有比私人信息更广泛的信息来源和更强的可验证性,这提升了家庭对公开信息质量的预期,为其提供了参与金融市场的更大激励。对中国而言,改善政策制定和执行的效率以及政策承诺的可信性有助于提升家庭对公开信息质量的预期,从而鼓励家庭参与金融市场。     

Rethinking the relationship between local government and financial markets

In the past 20 years local governments have increasingly looked to financial markets for capital financing. The markets want local governments to change their accounting systems and become more transparent, in order to offer information that is more appropriate to private sector investors. The authors argue that this approach is only a partial solution, and that local government and financial institutions would both benefit from changes in their relationships. The article identifies a double knowledge gap that needs to be filled if the public and private sectors want to work together as long-term financial partners.     

EDUCATION VOUCHERS IN PRINCIPLE AND PRACTICE: A SURVEY

An education voucher system exists when governments make paymentsto families that enable their children to enter public or privateschools of their choice. The tax-funded payments can be madedirectly to parents or indirectly to the selected schools; theirpurpose is to increase parental choice, to promote school competition,and to allow low-income families access to private schools.Some opponents predict that vouchers will destroy the publicsystem, aggravate poverty, and foster segregation. Others fearthat voucher-receiving independent schools will be regulatedout of recognition. The main purpose of this article is to examine the recent emergenceof voucher systems as an interesting phenomenon in its own right.The evidence summarized relates to voucher systems operatingin twenty countries, provinces, and states. The typical "funds-follow-the-child"voucher system, in which governments subsidize "schools of choice"in strict proportion to enrollment, appears to be the favoriteform. This type of voucher has been adopted by developing countries—notablyBangladesh, Belize, Chile, Colombia, Guatemala, and Lesotho—aswell as by industrial countries such as Poland, Sweden, theUnited Kingdom, and the United States. Much of the recordedexperience with such programs is pertinent to the longstandingtheoretical debates on the desirability of voucher systems.      

Local creative culture and audit fees

This paper examines the association between local creative culture and audit fees. Using a large, unbalanced panel data of listed US firms between 2004 and 2018, we find evidence that firms headquartered in US counties with high creative culture tend to pay higher audit fees than firms headquartered in counties with low creative culture. We also find that such firms tend to have longer audit report lag and are subject to more shareholder litigation. Cross-sectional tests show that real earnings management, managerial risk-taking propensity, and external corporate governance environment moderate the positive association between creative culture and audit fees. The positive association between local creative culture and audit fees remains robust to controlling for endogeneity concerns. Our study contributes to the emerging literature on local creative culture by providing evidence that local creative culture encourages managers and employees to undertake risky initiatives, thereby increasing audit risks.     

Auditor specialization, perceived audit quality, and audit fees in the local government audit market

Prior governmental research implies a positive relation between auditor specialization and audit quality, but the effect of specialization on audit fees is mixed. However, no single governmental study investigates the effect of auditor specialization on both audit quality and audit fees. Also, prior studies focus on either large- or small audit firms and often employ indirect proxies for audit quality. We study the effects of auditor specialization on perceived audit quality and audit fees. Our data represent both Big 5 and smaller audit firms and include three market-based measures of specialization. We survey 241 Florida local government finance directors and find that specialization is positively associated with perceived audit quality but not with audit fees. We also find that Big 5 auditors, often used as a proxy for higher audit quality in prior research, are not uniformly associated with increased perceived audit quality but consistently charge higher audit fees. Our results confirm a relation between measures of audit firm specialization and audit quality and raise questions regarding audit firm size and audit quality in the municipal sector. Our findings suggest that engaging specialized auditors may be good policy for many local governments.     

Drivers for the voluntary adoption of consolidated financial statements in local governments

ABSTRACT

This paper investigates consolidated financial statements (CFS), which have been implemented by several countries. In Italy, CFS implementation was preceded by a testing period in which local governments could participate on a voluntary basis. This paper explains why this was a useful preliminary step to implementing CFS: the local governments that took part in the testing period were able to enhance their knowledge of the topic while improving their employees’ skills.     

The association between municipal disclosure practices and audit quality

This study examines the impact of two proxies for audit quality on a model of public sector disclosure for a sample of municipal governments. I argue that more complete disclosures enhance the reputation of an independent auditing firm and that independent auditors, seeking to maintain a reputation of higher quality, positively influence the level of financial disclosures appearing in their clients' financial statements.Specifically, a variable indicating the presence of a (then) Big Eight auditor and regression residuals from a model of audit fees were used as surrogates of audit quality. These were included in a model designed to explain variation in an index representing financial disclosures required under generally accepted accounting principles for local governments. The results provide evidence in support of the hypothesized relationship between audit quality and disclosure.     

Central versus local education finance: a political economy approach

This paper models voters’ preferences over central versus local education policies when there are private alternatives. Education is financed by income taxes and individuals are mobile between communities. Public education levels are chosen by majority vote. Contrary to conventional wisdom, centralisation may benefit the rich and poor, while the middle class prefer decentralised education. The model is also extended to include peer effects. Peer effects increase the support for central school finance, even in the community with good public schools.      

The Market for External Audit Services in the Public Sector: An Empirical Analysis of NHS Trusts

This study investigates the market for audit services in the UK National Health Service (NHS). The market has a number of interesting features, including the presence of the Audit Commission as a regulator, appointer and provider of audit services. Following a theoretical overview of audit pricing in the NHS, evidence is provided on the behaviour of private sector auditors in an environment where audit risk characteristics differ from the private sector. The research also investigates, for the first time in the public sector, the relationship between audit fees and non–audit (consultancy) fees. Comparisons are also drawn between audit fees in the public and private sectors in an analysis of audit fees by industry. Despite some key similarities, the study shows that a number of differences exist between private and public sector audit fee models. In particular, we find no evidence of Big 6 (or mid–tier) auditor premiums, but we do find a significant negative relationship between audit and consultancy fees providing support for the 'knowledge spill–over' hypothesis. In addition, the fees charged to trusts appear significantly lower than their private sector counterparts, despite trust auditors having additional duties to perform. Possible explanations for this finding are offered in the paper.     

The Usefulness of Financial Reporting in Spanish Local Governments

Since 1992, accounting for Spanish local governments has been undergoing substantial change. The application of a new regulation has introduced the double entry system, an approximation to the accounting terminology used in the private sector and the presentation of financial statements beyond the purely budgetary reporting. In this context, the paper attempts to examine the extent to which the new regulation has achieved the objectives of financial reporting, who the users of the information could be, what the usefulness of the financial statements is and what they are used for in local governments. The results prove that the financial reporting of local governments can be useful for potential users like audit institutions, financial institutions or creditors. However, there is a long way to go before we can say that the information is used to the maximum. This implies that further progress is necessary in the use of financial information in local governments, and fundamentally it is necessary to introduce techniques of financial analysis traditionally used in business entities.     

The Impact of Mexico's Retraining Program on Employment and Wages

This article analyzes the impact and effectiveness of the Mexicanlabor retraining program for unemployed and displaced workers—Programade Becas de Capacitación para Trabajadores (PROBECAT).The strategy followed is to compare the post-training labormarket experiences of trainees with those of a comparison group—amatched sample of unemployed individuals who were eligible for,but did not participate in, PROBECAT. The results of this exercisesuggest that participation in PROBECAT reduced the mean durationof unemployment for both men and women trainees and increasedthe monthly earnings of men, but not of women. The results alsoindicate that the post-training earnings effect varied systematicallyby level of education attained, with the largest earnings increases(of about 28 to 37 percent) found for men with six to twelveyears of education.