Analysis Of The Economics Of Transition Education Reform

The paper analyzes the reasons, aims and modes of government intervention into education in the first chapter. Government intervenes into education with the modes of regulation, providing, financing, instruction and services aiming at offsetting the market failure and solve social problems, which can be formulated as the three concrete tasks as efficiency, equality and to solve social problems. The second chapter studies the development of government intervention into education with the framework resulted from chapter I. It has not come into being until the late of 18th century that government intervened in education. During the development of intervention into education, government firstly regulated the primary education, which is the formulation of primary compulsory education. The second step of government intervention into education was secondary education a nd vocational education, and then higher e ducation. W ith t he practice of welfare state policy in large scale, most of the developed countries have had public educational systems featured with complete government intervention until 1960s and 1970s. From 1980s, because of the low efficiency of public education, most of the countries have begun the market-oriented reform in education. Though there are some voices against the reform, the practice of most countries has showed that market-oriented reform has become the mainstream. The paper has concluded the practice and experience of other countries' reforms in public education so to use them as reference for China's reform in education. The following parts focus on the educational reform in China. There are lots of problems in China' educational reform, which has begun from 1985. In compulsory education, there is shortage of providing in countryside, otherwise there is over-providing in city. The analysis of the paper indicates that the key for China's compulsory educational reform is to give a proper boundary between market and government in education. The central and provincial governments have little responsibility for financing and providing for compulsory education, though they have lots of regulations in it. This "binary structure" of financing and regulation is the root of the problems in China's compulsory education. So the main task of reform is to offset this binary structure, and to transfer the financing responsibility from local government to central or provincial government. Meanwhile the market mechanism that can increases efficiency should be induced i nto c ompulsory education; h owever, t he g overnment should t ake t he responsibility t o offset the market failure and to solve the social problems in the process of transition and development with the economic features of education. In the non-compulsory education, there are problems including more education of senior middle school, less vocational education and high fees but low quality of higher education in China. The paper indicates that the root of these problems is at the hidden subsidy that the government gives to the higher school students, and at the over-regulation that the government gives to the higher schools. Under the over-regulation, it is cannot increase the quality and efficiency of high education by introducing fee system. This is the typical mode of government failure. These problems in high education are the main reasons for the over-providing of senior middle education and the shortage of vocational education. The paper concludes that the first step of non-compulsory education reform in China is to reduce the hidden subsidy that government gives to higher school students and regulate the structure of labor market, so to reduce the public's extra expectation to the higher education. The high schools should become autonomous and the market mechanism should be introduced into tertiary education field. The responsibility of government in tertiary education is to provide effective services and instruction and solve the constraint of liquidity for the poor students.