Does the source of funding shape authority structures and power in a Federalist system? Conventional wisdom suggests that local governments are at a detriment in shaping policy for issues that are aggressively funded at the state or federal levels. This project considers how source of funds shapes decision-making authority in education.  Education is an ideal arena to explore this question because the funding context has shifted dramatically in the last three decades, with both the state and federal government gaining additional responsibilities. 

We utilize variation in source of funding for K-12 education over time and the degree of centralization in policymaking authority across the fifty states to answer this question.  Using an event history analysis of policy choices to centralize oversight of local education agencies, we consider whether states that more aggressively fund education are more likely to accrue decision-making advantages over time.  The results suggest that politics, more than dollars, shapes authority in a federalist system though such trends are hardly immutable if states better leverage their power of the purse.