Raising the Bar: Provincial Coordination Dynamics of Public Education Finance and Fiscal Federalism in China's Action

Abstract

The intricate tapestry of educational finance decentralization remains a critical problem in public affairs discourse. This study systematically examines China's provincial coordination reforms in public education finance, utilizing panel data from 2006 to 2021 and employing quasinatural experimental methods. The analysis demonstrates that provincial coordination significantly enhances fundraising capacity and strengthens the supervision of fund utilization, thereby improving governmental fiscal commitment to education. However, the reforms exhibit limited effectiveness in promoting equitable allocation of funds between urban and rural areas, largely due to persistent disparities in resources and governance capacities in rural regions. Regional heterogeneity analyses further reveal marked temporal and spatial differences linked to varying levels of economic development and fiscal capacity. These findings underscore both the institutional achievements of provincial coordination and ongoing structural obstacles, such as entrenched urban–rural and interregional inequalities. By extending the theoretical framework of fiscal federalism, this study provides valuable empirical evidence and practical policy implications for advancing equity and quality in educational finance.