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Panchanan Das

Despite the initiatives of the Finance Commission of India, fiscal performance has been deteriorating and increasingly diverging across Indian states. Given that the state governments are endowed with expenditure autonomy, this chapter investigates whether the composition of expenditure of the subnational governments has an impact on the degree of indebtedness. A panel analysis for the 17 non-special category states over 1980–2013 indicates that apart from the budget structure, the state-specific factors affecting fiscal performance play an important role in government borrowing. Curiously enough, government borrowing is more responsive to revenue expenditure than capital outlay and has more growth-augmenting effect through revenue expenditure.

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Central and Local Government Relations in Asia

Achieving Fiscal Sustainability

Edited by Naoyuki Yoshino and Peter J. Morgan

Sustainable and inclusive growth in emerging Asian economies requires high levels of public investment in areas such as infrastructure, education, health, and social services. The increasing complexity and regional diversity of these investment needs, together with the trend of democratization, has led to fiscal decentralization being implemented in many Asian economies. This book takes stock of some major issues regarding fiscal decentralization, including expenditure and revenue assignments, transfer programs, and sustainability of local government finances, and develops important findings and policy recommendations.
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Shun-ichiro Bessho

This chapter aims to provide an overview of the basics of Japan’s local public administration and finance system and to analyze how Japan’s municipalities restore their fiscal balance after a fiscal shock. In Japan, local governments play a major role in redistribution. Combined with regional disparities in tax capacities and an inflexible local tax system, there is a large vertical fiscal gap in Japan between the central and local governments – a gap that necessitates the transfer of funds from central to local governments. Under this system, the fiscal adjustments in Japan’s municipalities occur mainly via changes in government investment, and they account for 63–95 percent of adjustments in permanent unit innovations in grants and own-source revenue. In contrast to the role of expenditure, the municipalities’ own-source revenue plays a limited role in balancing the local budget. The results of this chapter also reveal that 40 percent of the increase in own-source revenue is offset by a reduction in grants. Furthermore, municipalities can induce grants by expanding government current expenditure. Finally, this chapter offers and discusses some policy implications.

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Yuzhuo Cai and Fengqiao Yan

The chapter provides an account of the major structural changes in Chinese higher education since 2000. It focusses on governance, finance, and priorities and responsibilities to serve the social and economic modernization of the country. It concludes that enhancing Chinese universities’ social engagement and international research and development profiles is a necessary if China is to integrate with a global knowledge-based economy.

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Zhiqun Zhao and Xueping Wu

The chapter provides an account of the historical and current development of technical and vocational education. The modernization and reform of the system has shown the importance of technical and vocational education to skills development in the labour market. The authors conclude, however, that Confucian inspired prejudice continues to constrain public participation and engagement in technical and vocational education, irrespective of the central government’s policy commitment and interventions.

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Ping Zhao, Jun Zhou and Qiong Li

The chapter provides an account of the transition of teacher education from a single-purpose teacher preparation system to the current system where the responsibility of preparing future teachers is shared between normal universities and general-purpose (or comprehensive) colleges and universities. This has improved the qualification profiles of teachers in China. However, quality issues and regional disparities remain to be addressed.

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Xianan Hu and Fengliang Li

The chapter introduces the structure, governance and finance of the Chinese education system. The chapter explains the ways in which elementary, secondary and higher education in China relates to the politics, economy and culture of society, and the various issues that each phase needs to address if it is to achieve educational fairness and equality.

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Sarah Dauncey

The chapter provides a comprehensive examination of the development of special and inclusive education. It draws upon detailed analyses of the conditions for the development of an inclusive system, and provides convincing evidence that China has made great strides towards providing enhanced educational opportunities for its disabled population through state-led initiatives and policy making. It concludes, however, that multi-level and multi-form barriers remain to be overcome.

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Yu Zhang

The chapter provides an account of the structure and functional purpose of secondary education, which is to prepare a qualified labour force and educate high-performing students so that they may enter tertiary education. It highlights regional inequalities, especially between rural and urban areas. It concludes that central government recognition of the importance of secondary education will ensure a commitment to addressing issues of equity and quality in a systematic way.

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Su Wang

The chapter provides a detailed description of the latest curriculum change in science, technology and mathematics education in both formal and non-formal settings. It concludes with observations on the need to improve efficiency and coherence in national planning, in the consistency of curriculum standards and in the quality of teachers.