Abstract
Decentralization of education has been a recurrent policy debate in many countries. In 1989, the Swedish Parliament decided to transfer the political and economic responsibility for primary and secondary education from the state (the national level) to the municipalities. The reform, implemented in 1991/1992, increased the size of the Swedish municipal sector by one-fifth, making the reform one of the most sweeping in Swedish history. Despite broad support for the reform in Parliament, the process was slow, and deliberations continued for twenty years before the final decision was made. To understand the microprocesses underlying this decision and the slowness of the process itself, we refer to insights from behavioral economics. In addition to the empirical contribution, we show how behavioral economics can be used to improve historical analysis of decision-making processes. The article is based on studies of public records and on a unique set of interviews with key advisers and top-level decision makers, including the prime minister, which allow us not only to describe the process thoroughly but also to analyze it in the broader context of the Swedish welfare state.