Abstract
Lacking guidance of general equilibrium (GE) theories in public economics and the corresponding proper mechanisms, China has not surprisingly witnessed an inequality in educational expenditures across regions as well as insufficiency of funds for education in poor areas. It is wrongly thought that what happens is due to the decentralized financing system of basic education. This essay attempts to demonstrate that such a decentralized system is capable of encouraging local governments to improve the quality and efficiency of basic education. This is possible if the central government is involved in designing specific countervailing policies to reduce the negative impact of unequal access to education and sorting phenomenon on human capital accumulation for low-income families. This has particular significance for growth in a country that has a massive labor-intensive sector.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
References
Epple D, Richard E R (1998). Competition between private and public schools, vouchers, and peer-group effects. American Economic Review, 88(1): 33–62
Epple D, Richard E R (2002). Educational vouchers and cream skimming, NBER Working Paper 9354
Fernández Raquel, Richard R (2001). Sorting and long-run inequality. Quarterly Journal of Economics, (11): 1305–1339
Hoxby C M (1995). Is there an equity-efficiency trade-off in school finance? Tiebout and a theory of the local public goods producer. NBER Working Paper 5265
Hoxby C M (1996). Are efficiency and equity in school finance substitutes or complements? Journal of Economic Perspectives, 10(4): 51–72
Hoxby, C M (2001). All school finance equalizations are not created equal. Quarterly Journal of Economics, (11): 1189–1231
Hoxby C M, Kuziemko I (2004). Robin Hood and his not-so-merry plan: Capitalization and the self-destruction of Texas’ school finance equalization plan. Working paper. Cambridge, MA: Harvard University
Ladd H F (2002). School vouchers: A critical view. Journal of Economic Perspectives, 16(4): 3–24
Neal D (2002). How vouchers could change the market for education. Journal of Economic Perspectives, 16(4): 25–44
Peltzman S (1993). The political economy of the decline of American public education. Journal of Law and Economics, 36(1–2): 331–70
Peltzman S (1996). Political Economy of public education: non-college bound students. Journal of Law and Economics, 39(1): 73–120
Tiebout C (1956). A pure theory of local expenditures. Journal of Political Economy, (64): 416–24
Tsang M C (2000). Education and national development in China since 1949: oscillating policies and enduring dilemmas, China Review 2000. Hong Kong: Chinese University Press, 579–618
Tsang M C (2001a). Intergovernmental grants and the financing of compulsory education in China. Working paper. New York: Teachers College Columbia University
Tsang M C (2001b). School choice in the People’s Republic of China, Working paper. New York: Teachers College Columbia University
Author information
Authors and Affiliations
Corresponding author
Additional information
Translated from Zhongguo Shehui Kexue 中国社会科学 (Social Sciences in China), 2005, (6): 47–57
Rights and permissions
About this article
Cite this article
Ding, W., Lu, M. Are equity and efficiency irreconcilable goals in education?. Front. Educ. China 2, 163–180 (2007). https://doi.org/10.1007/s11516-007-0014-y
Issue Date:
DOI: https://doi.org/10.1007/s11516-007-0014-y