Education Finance And Public Choice

Using public choice theory, this article analyzes the evolution logic of the educationfinance. From the failure of education market, the author analyzes the necessity of publicchoice. Based on the political model of the direct democracy, this article analyzes the scopeand rules in making education finance policy collectively. Finally, the author analyzes thefailure of public school, and discusses the policies in reconstructing education market andtheir effects.This article can be divided to five parts;the structure of the article is as follows:In first part, from the views of education as quasi public goods, imperfect of capitalmarket and morals hazard, the author analyzes the causes of education market failure and thereasons that public choice should introduced.In second part, from the cost of making decision, benefit scope and the scale economy,the author analyzes optimal scope towards education finance and the mechanism ofdeveloping of the optimal scope caused by Tiebout choice.In third part, the author analyzes the optimal rule in making education finance policycollectively, and discusses under how to make the education finance decision under onecategory proposal and many category proposal.In fourth part, the author analyzes the failure of public school, and proposes thatseparating the provision and production of education and reconstruction the education marketmay be a way to improve the education productivity.In fifth part, this article analyzes and evaluates the quasi market reform of educationfinance, and point out its disadvantage in equity.