| According to the New Institutional Economics theory, the shortage and loss of teachers in some local area of China is due to the over high transaction costs in those area's teacher-supply markets. The government carried out a new free-fee plan for some normal students in 2007, which is, to some extent, a kind of approach to decrease the cost in some certain regions. However, if the reason of policy was on the base of "market failure", there should be something called "government failure" as well. Rome was not built in one day. The free-fee plan is just one part of a policy-package to form an order for China's teacher supply market. |
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