The environment surrounding Japan is nothing but turbulent. In Asia, China and Southeast Asian economies are continuing to achieve robust growth. Japan, however, remains mired in the prolonged economic doldrums. Saddled with enormous debt, the government finds little, if any, room to implement fiscal stimulus measures to boost the economy. Moreover, Japan's working population is set to decrease further going forward as the trends of population aging and low fertility are likely to continue. If Japan, a matured economy, is to sustain its economic growth into the future against such daunting circumstances, raising the levels of knowledge and productivity of individuals is a pressing need. Indeed, it is essential to accumulate human capital through school education as well as by effectively utilizing the limited resources for this purpose. In order to realize this, we must, first and foremost, clearly define the responsibility of the government--i.e., what role the government should play under a transparent and accountable governance system for education--and design an effective, efficient, and impartial system to govern the financing of education (to ensure the optimal allocation of resources under fiscal constraints).
Based on these observations, this research project seeks to explore the effective allocation of resources as a way of covering the cost of public education for developing human capital geared to future economic growth. In doing so, we will take the viewpoint of integrated government-wide fiscal management, rather than limiting the scope to education, and aim to put forward a set of policy proposals for building a viable governance system to regulate educational finance.
September 14, 2011 - August 31, 2013