The authors interest in the design of economic policy regarding education and innovation has motivated his research as a doctoral candidate. Four independent projects have emerged, each of which deals with basic research problems of education and innovation economics. All but the first take a cliometric perspective. That is, econometric analyses - for the most part count data regression analysis and panel data analysis - are applied to historical data which are in part made newly available or augmented significantly by the author. The theoretical basis of the work is provided by the fields 'public finance', 'political economy', 'growth theory', 'human capital theory', and 'innovation-driven growth theory'.The first project reveals that the prevailing notion of education externalities is misleading and therefore empirical quantification attempts are inadequate. Distinguishing between the concepts 'education' and 'teaching' it is argued that growth externalities of education according to Lucas (1988) are likely to be internalized on the labor market. Education is recognized as a private good with well-defined property rights. Individuals may exploit those to receive compensation for their investment in education. Further, by differentiating 'education' and 'knowledge' it becomes obvious that growth externalities according to Romer (1990) are not directly related to education, but arise from the knowledge generation process. From these insights, three further research questions emanate, which build the foundations of the remaining projects.If growth externalities of education are called into question, what do governments use as a guideline to determine the extent of public educational spending? In the second project, the author is specifically interested in the influence of different regime types. An analysis of worldwide government spending during the interwar period reveals that in the long run democracies tend to spend less public money on education than autocracies. This is potentially because educational systems are a channel through which autocratic regimes may transmit their ideology. On the other hand, the more advanced private systems of education in democracies may simply crowd out the public educational effort in the long run.Motivated by the finding that growth externalities due to knowledge generation are more relevant for policy design than growth externalities due to education, the third endeavor attempts to come about the nature of the innovation process and its feedback into economic growth. Exploiting a literature-based measure of national innovative success during the last 500 years, the author finds that actual national economic growth depends less on a countrys innovativeness, and more on its ability to adopt technologies. Growth potential in turn is determined by the international technological frontier. The size of a country's contribution to frontier shifts can be ascribed mainly to population size. Also, institutions play an important role. A positive effect of the human capital stock, however, does not emerge from the analysis. In the knowledge generation process, the latter does not seem to be as crucial as in the process of knowledge adoption. Because this finding is at odds with many economists central tenets, it makes sense to validate it based on micro-evidence.The author approaches this task in his final research project by scrutinizing the biographies of historical inventors and testing whether their formal level of schooling enhanced their contribution to technological development. Formal schooling is found to be beneficial for innovative success only in very narrow biographical settings. Specifically, it may compensate for unequal starting conditions. But no support is given to the notion of schooling generally being able to enhance an individuals innovative potential. Trying to explain this finding, it makes sense to think about innovative individuals as characters who strive for creative self-realization and acquire the needed skills informally, if they are deprived of formal schooling.It is concluded from the findings that political and scientific efforts should focus more on quality of schooling and less on quantity. Also, research subsidies may be a more meaningful tool to compensate for growth externalities than higher education subsidies. Further, the design of national system of innovation is important to foster innovation, and evaluating new technologies can provide a basis for informed decisions regarding public support of research projects.