Account Of State Research Articles

Promotion and reassignment in public school districts: How do schools respond to differences in teacher effectiveness?

We use a unique administrative database from the state of Florida to provide the first evidence that promotion and other job reassignments within school districts are systematically related to differences in teacher effectiveness in raising student achievement. We follow the career paths of a cohort of almost 25,000 classroom teachers during the 2001–2002 school year for seven subsequent years. Our results confirm that effective teachers are more likely to become assistant principals or principals and less likely to be reassigned to a low-stakes teaching position. The tendency of highly effective teachers to continue teaching in high-stakes grades and subjects is strongest in schools receiving low ratings from the state's school accountability system. Teachers entering the principal track experience a large increase in annual earnings, but the share of teachers promoted in this way is small enough that future compensation remains largely unrelated to effectiveness for teachers as a whole.

Notes on violence: Walter Benjamin's relevance for the study of terrorism

This article uses Walter Benjamin's theoretical claims in the ‘Critique of violence’ to shed light on some current conceptualisations of terrorism. It suggests an understanding of terrorism as an essentially contested concept. If the theorist uncritically adopts the state's account of terrorism, she occludes an important dimension of the phenomenon that allows for a rethinking of the state's claim to a monopoly on legitimate violence. Benjamin's essay conceptualises the state as resulting from a conjunction of violence, law, legitimacy and power that rests on mythical ideas about nature and history. It shows why the state claims to be justified in taking exceptional measures when this link is challenged and when its prerogative to the legitimate use of force is called into question. This, I argue, is what terrorism does. Thus, Benjamin's essay adds to a more nuanced and less one-sided understanding of both terrorism and state violence.

Humanity as the A and of Sovereignty

The article argues that the principle of sovereignty is being ousted from its position as a Letztbegrundung (first principle) of international law. This trend is welcome. Sovereignty must and can be justified. The normative value of sovereignty is derived from and geared towards humanity that is the legal principle that human rights, interests, needs, and security must be respected and promoted. State sovereignty is not merely limited by human rights, but should be seen to exist only in function of humanity. It has thus been humanized. Consequently, conflicts between state sovereignty and human rights should not be approached in a balancing process in which the former is played off against the latter on an equal footing, but should be tackled on the basis of a presumption in favour of humanity. A humanized state sovereignty implies responsibility for the protection of basic human rights and the state's accountability. The humanization of sovereignty also suggests a reassessment of humanitarian intervention. In contrast to sovereignty, non-intervention is constitutive for the international legal order and must be upheld as a rule. Moreover, the independent principles of human rights protection and self-determination constitute additional shields against unilateral interventions. But when human rights, needs, and interests are acknowledged as the systematic and doctrinal point of departure of the legal argument, the focus is shifted from states� rights to states� obligations towards natural persons. A state which grossly and manifestly fails to discharge these duties has its sovereignty suspended. Starting off from human needs leads, in a system of multilevel governance and under the principle of solidarity, to a fall-back responsibility of the international community, acting through the Security Council, for safeguarding humanity. In that perspective, the Council has under very strict conditions the duty to authorize proportionate humanitarian action to prevent or combat genocide or massive and widespread crimes against humanity. The exercise of the veto by a permanent member in such a situation should be considered illegal or abusive. The ongoing process of a humanization of sovereignty is a cornerstone of the current transformation of international law into an individual-centred system.

Testing Historical Knowledge: Standards, Multiple-Choice Questions and Student Reasoning

This article explores the reasoning employed by high school students to answer a set of multiple-choice history questions. The questions come from New York State's Global History and Geography Regents exam. The Regents exams, together with a particularly well-regarded and ambitious set of content standards, are the cornerstone of the state's standards-based accountability system. Using “think-aloud” and interviews with a small sample (n=13) of urban 10th graders, the knowledge and skills elicited by a small sample of items are explored. This article begins with a discussion of the state standards and the discipline-based knowledge and skills that they describe. It continues with a report on the extent to which the student-participants were exposed to the material included in the administered items by a teacher whose pedagogy was commensurate with state standards. The bulk of the paper focuses on two test items that were particularly effective at discriminating between high and low performers. The reasoning and knowledge employed by participants when answering these questions are explored. The findings support previous research indicating that the assumptions made by adults about what items measure are often only partially correct. In the case of the items included in this study, they appeared to evoke knowledge and skills in three domains—history content, literacy, and test-wiseness—but not the discipline-based thinking so highly prized by the standards.

Professional Development Worth Paying for

The National Center on Education Statistics projects that, in 2009, nearly 3.3 million teachers will teach in public schools across this country. That's a projected increase of 36,000 teachers over 2008, or about 1% of those in the classroom. improving the quality of instruction truly is a goal, we cannot ignore the fact that 99% of staff are already working with kids. Certainly, improving teacher preparation programs can impact that 1% or so of teachers entering the profession each year, and over the years, those numbers do add up--but we also need to pay greater attention to developing teachers already in our classrooms. Determining Cost-Benefit While state leaders understand the value of professional development, they also need to consider the costs. Such costs are some of the most difficult to calculate. The complex way in which professional development is interwoven into recertification and local salary schedules and included in the required number of school days makes it difficult to pinpoint what's spent and who pays. For policy makers, cost increases the importance of showing results. Some states try to ensure program quality by accepting recertification credits only from approved program providers. Until recently, evaluation based on results of those and other programs has been scarce. For the most part, educators have received credit for seat time, with little attention to changes in instructional practices. state leaders are going to pony up for improving the instructional skills of teachers and principals, they want to know that their dollars are well-spent. The same can be said for taxpayer parents, who increasingly find their children at home on early-release or late-start days. They want a reasonable assurance that noninstructional time is well-spent and is making a difference to their kids. A growing number of policy makers are insisting on evaluation--particularly tied to increased student learning. Equating with Impact According to A Vision for Professional Development in All Vermont Schools, Quality professional development has the power to increase educators' knowledge of academic content and teaching skills, while changing what educators believe about student learning and how they interact with students. Powerful professional development can transform schools into places in which all adults and students are deeply engaged in learning and making meaning of their lives. How can we tell what's powerful? The National Staff Development Council (NSDC), author of the Standards for Staff Development, asserts that If staff development is to improve student learning, many levels of change are required, each with its own particular evaluation challenges. Unfortunately, a great deal of staff development evaluation begins and ends with the assessment of participants' immediate reactions to workshops and courses. While this information may be helpful to staff development planners, good evaluation design also gathers additional information. Beyond the 1) initial collection of data on participants' reactions, evaluation must focus on 2) teachers' acquisition of new knowledge and skills, 3) how that learning affects teaching, and in turn 4) how those changes in practice affect student learning. In addition, evaluators may also be asked to provide evidence of 5) how staff development has affected school culture and other organizational structures. Tied to Student Learning More states are beginning to focus on evaluation. Arkansas' criteria for evaluating the impact of professional development include improving student achievement on state assessments, other related indicators as defined by the state's accountability system, and evaluations of professional development. In Iowa, 2007 legislation requires the state department to collaborate with local districts to establish teacher development academies for school-based teams of teachers and administrators. …

The Case of Nord-Ost: Dubrovka and the Search for Answers

The paper reviews the experience of the group Nord-Ost (The Regional Social Organisation for Assistance and Defence of the Victims of Terrorist Acts) as an example of an NGO that has taken a rights advocacy position which has led it into confrontation with the state. Nord-Ost demands the state's accountability for the consequences of its response to the 2002 Dubrovka terrorist attack. Thus, it confronts challenges common to other rights advocacy groups in Russia today.

Avoidable losses: High-stakes accountability and the dropout crisis.

In the state of Texas, whose standardized, high-stakes test-based accountability system became the model for the nation's most comprehensive federal education policy, more than 135,000 youth are lost from the state's high schools every year. Dropout rates are highest for African American and Latino youth, more than 60% for the students we followed. Findings from this study, which included analysis of the accountability policy in operation in high-poverty high schools in a major urban district, analysis of student-level data for more than 271,000 students in that district over a seven-year period under this policy, and extensive ethnographic analysis of life in schools under the policy, show that the state's high-stakes accountability system has a direct impact on the severity of the dropout problem. The study carries great significance for national education policy because its findings show that disaggregation of student scores by race does not lead to greater equity, but in fact puts our most vulnerable youth, the poor, the English language learners, and African American and Latino children, at risk of being pushed out of their schools so the school ratings can show "measurable improvement." High-stakes, test-based accountability leads not to equitable educational possibilities for youth, but to avoidable losses of these students from our schools.

Public Interest Litigation and Human Rights Implementation: The Indian and Australian Experience

AbstractPublic interest litigation [‘PIL’], typically defined as proceedings in which the public or the community at large has some pecuniary or legal interest, demonstrates an ability to foster human rights compliance. It does this by enabling broader community or ‘public’ interests to be recognised and enforced through the judicial process, thereby revealing greater potential than private rights litigation in addressing the systemic nature of many human rights violations. This in turn has presented greater opportunities domestically to monitor each state's accountability to international human rights standards.This paper compares and contrasts the emergence and development of PIL in two jurisdictions - India and Australia. India was chosen for its remarkable and extensive development of PIL unparalleled in Commonwealth jurisdictions to date, and Australia, for its adoption of a much more restrained and traditional trajectory in line with other members of the Commonwealth. Although PIL has developed differently in the two countries, inevitably shaped by differences in culture, economic development, law and politics, both provide illustrations of PIL's potential (and limitations) in facilitating the development of human rights norms in domestic legal systems.

European Public Participation as Risk Governance: Enhancing Democratic Accountability for Agbiotech Policy?

European decision-making on techno-scientific issues has encountered public suspicion and legitimacy problems. These have resulted from government policies promoting specific technologies as if they were objective imperatives. The consequent difficulties have been diagnosed according to various `deficit' models, which in turn inform efforts at governing the societal conflict. Anticipating or responding to European public concerns over agricultural biotechnology (agbiotech) in particular, state bodies have sponsored participatory exercises. Some participants sought to open up technological decisions vis à vis alternative futures and normative choices, but such efforts were marginalised. Questions about agbiotech as control were displaced and channelled into regulatory issues and control measures. Despite aspirations to democratise technological choices, the exercises tended to biotechnologise democracy. To some extent, participatory technology assessment (TA) exercises anticipated, stimulated or reinforced policy changes which enhance the state's accountability for regulatory frameworks—but not for its commitment to a specific innovation trajectory. Pervasive tensions have arisen between discussing a `common' problem (e.g. how to make agbiotech safe or acceptable) versus containing conflicts around how to define the problem. These tensions have taken the form of contested boundaries—between policy versus scientific issues, between social versus technical ones, as well as between lay versus expert roles—thus performing different models of the public. These dynamics can be analysed by linking critical theories of technology, deliberative democracy, performative interactions and neoliberal governance.

Giving All Students the Keys to College and Skilled Careers: One District's Approach

THIS IS the story of how the Garden Grove Unified School District in California is taking the challenge of preparing students for and skilled careers. Though every student may not plan to attend college, the district has decided that the opportunities made available to students should not depend solely the foresight of teenagers or the prejudgments of adults. The curriculum that gives each student the ability to succeed in college, should he or she choose to attend, also provides the key that unlocks the door to skilled for the non-college-bound. Though many definitions of college and career readiness are possible, Garden Grove's operational definition is that students are deemed if they complete California's full A-G college-readiness course sequence and demonstrate mastery of the content of each course through an end-of-course exam. Checking for students' learning of course content is important because Garden Grove wishes to guarantee to students, parents, colleges, and employers that course labels accurately advertise what the student has learned. (1) Taking as great a challenge as seeing that all students are ready for and skilled careers has required, first, an unflinching recognition of how far the district has to go. On arriving at the lowest base camp at Mount Everest after an arduous climb, one doesn't conclude that the mountain has already been conquered. While Garden Grove's graduation rate has been higher than those of many of the district's counterparts, this number decreases greatly when you count only those students who are college ready. (2) Substantial short-term gains can be made by making sure that students who are well prepared academically enroll in challenging high school courses, but extending that success depends how well the district prepares students between preschool and eighth grade to succeed in those courses. Quick fixes are no more likely than shortcuts to the summit of Mount Everest. BACKGROUND Garden Grove is one of the growing number of urban suburban districts in the U.S. It serves 50,000 students in parts of seven municipalities in the Los Angeles area. The district's demographics are essentially urban: of the district's roughly 50,000 students, 60% receive subsidized lunches; 53% are Hispanic; 31%, Asian; 15%, white; and 1%, African American. The district is heavily populated by families who immigrated recently to the United States. English is the second language for roughly 80% of the district's students, who speak 68 different languages. Garden Grove has a number of advantages that have put it in a better position to take the challenge of educating its students to high levels. In particular, Garden Grove has been relatively free of many of the afflictions that have made it difficult to improve districts, such as unstable leadership, politics arising from issues peripheral to student learning, and the endless churning or layering on of multiple programs, practices, and new initiatives, so that the hapless school system never gets to do a good job of implementing any one thing. (3) Garden Grove strives to do an excellent job of implementing a small number of programs and strategies, and thus the district has been careful not to undertake any activity, even one attached to a large grant award, unless it ties directly to the district's goals. The implementation of No Child Left Behind (NCLB) has complemented Garden Grove's own growing focus the use of data to inform teaching and learning. California had already begun testing in more grades than NCLB requires, and Garden Grove has found the NCLB-required disaggregation of data by income and ethnic group highly useful. The goal-setting focus of the law matches well with Garden Grove's approach, and the district has developed two specific and measurable internal goals that, if met, will address the requirements of the state's accountability system and NCLB. …

Performing Parent Dialogues on High-Stakes Testing: Consent and Resistance to the Hegemony of Accountability

Assessment-driven accountability has altered the way schools deliver their services to children, and their relations with parents. Listening to how parents talk about their experiences with testing fosters an understanding of the discursive power found in the state's accountability rhetoric about learning, achievement, and assessment and how this discourse is accepted or rejected by parents. Focus groups with parents were conducted as part of a naturalistic study examining state-mandated testing and teaching and learning in two New York State school districts: one suburban and one urban. In four dialogic acts, we bring to life the questions, concerns, and understandings parents have of the impact state testing has on their children's educational experience. These acts represent areas of struggle for parents as they make sense of the new accountability discourse. They can be thought of as a performed critique of this discourse and its exemplification.

Perceptions of the impact of accountability on the role of principals.

Calls for accountability in America's schools have created increased responsibilities for educational leaders. In this article, we describe and discuss a study of elementary, middle, and high school principals' perceptions of the state-wide educational accountability program in North Carolina. The respondents indicated that the state's accountability program has had its greatest impact on how they monitored student achievement, aligned the curriculum to the testing program, provided student remedial or tutorial opportunities, assigned teachers to grades levels or subjects, and protected instructional time. Views of some components, such as measures of school effectiveness, school safety standards, expectations and promotion standards for students, and financial bonuses received by staff members in schools that meet expected achievement standards, were viewed favorably. In contrast, the No Child Left Behind Adequate Yearly Progress (AYP) requirement (incorporated into the state's accountability program), testing requirements for Limited English Proficiency students and special education students, the sanctions applied to schools that do not meet expected growth, and the school status designation labels that are applied to schools based upon student achievement were perceived more negatively. The predictable and unpredictable outcomes of a mandated accountability program on the perceptions (and behavior) of school principals create important considerations which are discussed for policy-makers and other professionals dealing with standards-based reform.

Assessing the Use of Econometric Analysis in Estimating the Costs of Meeting State Education Accountability Standards" Lessons From Texas

In 2004, over 300 school districts in Texas challenged the constitutionality of the Texas system of school finance. In West Orange-Cove et al. v. Neeley et al., the plaintiffs argued that because most school districts were at or near a state-imposed property tax rate ceiling and because the share of state education funding was declining, most school districts had inadequate funds to satisfy the student performance standards mandated by the Texas Educational Accountability system. To address the empirical question of whether school districts have insufficient resources to meet the state's accountability standards, two cost function analyses were conducted. One study, entered into evidence by the state of Texas, reached the conclusion that "in aggregate, the level of education funding in Texas is more than sufficient to meet performance goals consistent with the state's accountability system." The other study, entered into evidence by the plaintiff school districts, concluded that, in aggregate, Texas school districts would need at least $2 billion in additional revenue to satisfy the requirements of the accountability system.In this article we describe the methodological similarities and differences between the two cost function studies and provide an assessment of why the two studies arrive at such different results. Based on the outcome of the case in district court-a victory for the plaintiffs-the article draws some lessons about the use of statistical-based models in a judicial setting.

Accountability with a Kicker: Observations on the Florida A+ Accountability Plan

The A+ Accountability Plan in Florida predated NCLB but has similar provisions. Thus, the authors realized, a study of how the system has played out in Florida might allow us to see where NCLB is leading us. IN 1999, FLORIDA implemented a major reform of its accountability system, called the A+ Accountability Plan. A unique aspect of the A+ Plan is its explicit attempt to invoke market forces by allowing students in low-performing schools that meet specified criteria to receive vouchers that can be redeemed at an eligible public or private school. It is this scholarship (the portion of the A+ Plan that allows for vouchers) that set the accountability system in Florida apart from that of any other state at that time. Since then, the Supreme Court's Zelman decision ruled that using vouchers for religious private schools is permissible.1 In addition, the No Child Left Behind (NCLB) Act requires that all schools failing to achieve adequate yearly progress (AYP) implement a program similar to the opportunity scholarships in that it would allow students to choose alternative public schools. In many ways, the accountability program begun by Florida in 1999 was a precursor to the type of accountability systems that NCLB is now requiring states to implement. Thus studying Florida's school and district responses to the provisions of the A+ Plan may yield important insights into what we should expect to see elsewhere. Much of the controversy and debate over the passage of NCLB focused on its accountability and voucher provisions. Many of those in favor of such reforms argued that public schooling was (and is) a closed system, unlikely to change in any fundamental way without the kicker increased competition would provide. The basic argument was that competition would provide schools with a clear incentive either to perform well or to risk losing students to higher-quality alternatives offered at the same price.2 In short, the theory that competition can improve education presumes that inefficiencies resulting from the monopoly of the public school system are the cause of low performance in American education.3 For a variety of reasons, however, it is not at all clear that schools will respond to increased market competition in the same way that the classic competitive model predicts for industry. Most important, they may have trouble discerning what changes would be beneficial to students or implementing effective reforms. The research we report here is part of a larger effort focusing on how schools in Florida are responding to a new accountability system with many of the same provisions as NCLB. We will briefly describe publicly reported information on school performance in Florida since the inception of the A+ Plan, and then, using evidence gathered from our case studies, we will attempt to provide a more nuanced picture of the program's effect on schools -- particularly the relationship between school accountability grades and the threat of vouchers. The A+ Plan and School Performance At the time it was implemented, the Florida voucher program was unique in that it was established by law as an integral part of the state's education accountability system. With the A+ Plan, students in schools that receive a grade of F in two out of any four years and currently have an F grade are eligible to receive vouchers that can be used at another, nonfailing public school or at a private school, including a religious school. Schools' grades are based on their students' performance on the FCATs (Florida Comprehensive Achievement Tests) -- the state tests in math, reading, and writing -- and on dropout rates. The value of the vouchers awarded for students to attend private schools in 2002-03 ranged from $3,463 to $4,311 for basic K-12 education.4 In short, the program is broad based, institutionalized, and reasonably well funded. (For further details on the Florida A+ Plan, see www. …

Creating state accountability to rape survivors: a case study of Boksburg Regional Court

abstract Laws, policies and guidelines have been developed to improve the treatment of rape survivors by the criminal justice system. Our case study of Boksburg Regional Court finds that these innovations have not necessarily brought about the desired changes. If this is true of one court, then to a greater or lesser extent, it is likely to be true of many other courts, given how widespread these problems were prior to the introduction of these remedies. The findings also challenge those of us working in the criminal justice system to devise and implement measures designed to uphold the state's accountability to rape survivors.

"Private" security guards: Privatized force and State responsibility under international human rights law

Private security is one of the fastest growing industries in the world. In some sense, its rapid expansion leading into the beginning of the twenty-first century exemplifies the prevailing neoliberal ideology, particularly its twin features of privatization and deregulation. Governments seek to decrease public expenditure and regulatory control by selling off public services, including prisons and police forces, supposedly to be run more efficiently under competitive market conditions. But the turn of the century has also seen increased resistance to these developments as popular movements have opposed the privatization of what are perceived to be essentially public services, demanding that government maintain its role as a service provider in the public interest. Within this debate, then, private security and the privatized use of force represent a challenge to the State of the legitimate use of physical However, it is the State's public accountability that legitimizes its powers of coercion, an accountability that is lacking, at least from a human rights perspective, when private parties use force for their own purposes. Thus, it becomes necessary to examine whether a State can legitimately relinquish to private security guards its monopoly over the use of force.

Administrative capacity and welfare reform in North Carolina: does administration matter?

This study examines the administrative role played by the state of North Carolina in the provision of welfare. A survey of county professionals was conducted in April 2000 assessing perceptions of how well the state was performing its administrative functions. Fifty-three survey items composed ten indices that were grouped into three categories of resources, leadership and accountability. Logistic regression analyses examined perceptions of the state's Resources, Leadership, and Accountability administrative capacity in relationship to the four Work First Report Card measures of (1) putting people to work, (2) having them stay off of welfare, (3) reducing the number on welfare, and (4) collecting child support. Findings indicate that the state's efforts are not perceived as contributing to the success of welfare reform. Administrative capacity perceptions account for little of the variation explained by the logistic regressions. The state is not perceived as contributing to putting people to work or helping them to stay off of welfare subsequently. It actually is seen as slightly hindering efforts at reducing the welfare rolls. Only in the area of child support collection does state administrative capacity (in leadership and budgeting) improve the odds for success.

The Accountablity Challenge

This case decribes a large urban school district that faces the usual challenges found in these districts such as poverty, deteriorating school facilities, school integration, bussing, and student academic performance in the state's high stakes accountability program. The former superintendent, who did not particularly like the state's accountibility program, abruptly resigned after two years in the position when the district's test results were received. As a result, the school district is scheduled to be placed on warning status by the state. The school board is left with a public relations problem, a staff morale problem, the problem of nine low performing schools, and the challege to immediately select an interim superintendent. However, the central focus of the case is educational accountability as measured by student performance on the state's high stakes testing program.

Privatisation and New Modes of State Intervention: The Long-Term Care Programme in Israel

This article analyses the formulation and implementation of a relatively new statutory programme of care services for dependent elderly people in Israel, which has as a basic characteristic the supply of services by non-state agencies. The analysis serves as a basis for an exploration of the effects of privatisation and the emergence of quasi-markets upon the functioning of the welfare state both as a benefits provider and as a major employer. In contrast to the perspectives that consider privatisation as leading to the weakening of the state in the welfare domain, we argue that through the transfer of services supplied by non-state agencies the state protects itself from demands and pressures from clients, while maintaining its control and regulation capabilities. This process decreases the state's accountability towards its citizens, enhancing in turn its autonomy. Privatisation policies do not imply, therefore, the dissolution of the welfare state, but rather the emergence of a new mode of state intervention.

Policy Burdens, Accountability, and the Soft Budget Constraint

In a socialist economy, when a state-owned enterprise (SOE) incurs losses, the government often provides it with additional funding, cuts its taxes, and offers other compensations. Coincidentally, the managers of an SOE also expect to receive financial assistance from the state. Such a phenomenon is called the soft budget constraint (SBC), a term coined by Janos Kornai (1986). Kornai attributes many problems in a socialist economy to the existence of the SBC. To achieve successful reform of both the SOE's and socialist economies, it is imperative to eliminate the SBC. However, the SBC phenomenon continues to exist in transitional economies, even after SOE's are privatized (World Bank, 1996 p. 45). There is a large literature on the SBC. Mathias Dewatripont et al. (1996) and Eric Maskin (1996) provide surveys on the recent literature. According to Kornai (1998), there are two types of explanations for the existence of the SBC: the exogenous and endogenous. Explanations of the first type attribute the existence of the SBC to various exogenous reasons, including the paternalism of a socialist state and the government's aims for job creation or for gaining political support (Kornai, 1986). Explanations of the second type view the SBC as an endogenous phenomenon, arising from a time-inconsistency problem (Dewatripont and Maskin, 1995). For an inefficient, uncompleted investment project, the state or creditor may have incentives to refinance the investment because the marginal benefit of refinancing exceeds the marginal cost of abandoning it. Yingyi Qian (1994) attributed the shortage of goods in socialist economies to the SBC based on such a timeinconsistency argument. In this paper, we provide another explanation for the prevalence of the SBC in socialist and transitional economies. We will argue that the SBC is rooted in the state's accountability problem. The traditional Stalinist system was designed to facilitate the establishment of certain strategic SOE's, which were not viable in a market system. To establish the nonviable SOE's, a socialist government distorted the prices of all kinds of inputs and of outputs and used administrative measures to allocate these inputs and outputs according to plans. However, due to information and coordination problems, the state could make wrong decisions regarding investment/production and fail to deliver necessary materials and inputs in time. Consequently, the state, instead of SOE's, was accountable for the failures and needed to allocate additional credits and other assistance to the SOE's in order to complete the investment and production. As such, the SBC arose. After the transition to a market economy, many strategic firms still remain nonviable in a market economy. For strategic purposes, the state needs to support these finns. Moreover, most firms in a transitional economy carry many types of policy burdens, inherited from the pretransition system (Lin et al., 1998). Because the state is accountable for the losses arising from policy burdens, the SBC phenomenon persists. In a market economy, the state's attempts to build nonviable industry and the state's policy burdens on enterprises will also lead to SBC.