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This article examines the determinants of primary education spending among 29 Mexican states from 1999 to 2004. There is wide variation in spending despite expectations of policy convergence due to market forces associated with globalization, and in spite of the unique potential of education spending to complement economic strategies in achieving equitable growth. This study exploits significant advantages of subnational analysis in exploring political and economic variables that have been useful in explaining spending levels cross-nationally. Consistent with these studies, this article shows that greater electoral competition leads to increased spending. In contrast to other work, however, this study finds that exposure to the global economy has distinctly mixed effects on education spending. These findings thus further highlight the positive returns to higher “quality” democracy, while underscoring the need to examine the effects of many different aspects of globalization representing a wide variety of strategies employed by governments in engaging the international economy.