Between Local Community and Central State: Financing Basic Education in China

Overview & Synopsis

From the early 1980s, China underwent perhaps the world's largest and most comprehensive experiment of decentralization in education. There has been a shift from decentralization to some degree of recentralization, however, since the mid-1990s, particularly since the early 2000s. The purpose of this shift was to establish a stable and regularized financing mechanism for rural education. Using provincial-level data from between 1997 and 2005, this paper analyzes whether the shift worked as expected. It finds that by the end of 2005, there had been a substantial decrease in the rural-urban gap, the regional disparity, and the overall inequality in per student budgetary expenditure and total spending. Much of the decline occurred in the 2000s. Moreover, the rural-urban gap declined more rapidly than the regional disparity, and inequalities in spending on primary education declined much more rapidly than junior secondary education. (Contains 5 tables.)