Research on the Relations between the Public Expenditure on Education and Inequality in China

Abstract

Public expenditure on education has often been perceived as objective and egalitarian, but in reality it is not. Political pressure often results in incidence bias in favor of the rich. This paper argues that the bias in political influence resulting from extreme income inequalities is particularly likely to generate an incidence bias, which we call social exclusion. In this paper it has been argued that, while this is a worthy policy goal in terms of equality and long-run growth, there are deeply rooted political reasons for existing provision arrangements to be unfavorable to the poor. It implies that the political bias induced by extreme income inequality is one major obstacle in a reform of existing programs, and opposition by influential political interests is to be taken into account in a meaningful debate about the implementation of more egalitarian reforms.