China Case Study

Abstract

Shows how China improved the adequacy and equity of government educational expenditure and how the changes improved education outcomes by (1) describing the education finance system and its changes over time, focusing on pretertiary education and on the decentralization of education funding and provision; (2) discussing how the evolution of the education finance system has affected the adequacy and equity of education spending and development; and (3) recognizing the challenges to the current system, particularly with regard to equity, and offering some potential policy solutions. Subnational governments, particularly counties, remain primarily responsible financing and administration of pretertiary education. However, there exists a large and growing cascading system of financial transfers from the central government to local governments aiming to help equalize educational funding across regions. Nevertheless, inequality remains one of China’s biggest challenges and will require the central and provincial governments to considerredistribution across regions and improve incentives to support schools in poor regions.