The effects of tightening financial management of research grants on the level and structure of Chinese universities’ research funds 2008-2016

• In Event: Roundtable Session (Tuesday V)
  In Refereed Round-Table Session: Higher education SIG roundtable 3

Proposal

After the Eighteenth National Congress of the Communist Party of China, General Secretary Xi Jinping waged an anti-corruption campaign. The Ministry of Education responded positively and promulgates three policies tightening the financial management of research funds in Chinese universities. This paper exploits this abrupt changes in policies as a natural experiment and construct panel data of 73 MOE-administrated universities from the Statistical Abstract of Social Science Disciplines in Chinese Universities, published by the Department of Social Sciences of the Ministry of Education 2008-2016. We employ the Comparative Interrupted Time Series (CITS) methodology to estimate the causal impact of the policy on the level and its composition of research funds in the social science disciplines using the ‘horizontal’ research funds as the control group for the ‘vertical’ research funds. The ‘vertical’ research funds come from government coffer through competitive or non-competitive processes. They are part of the criteria to evaluate the performance of a faculty. The ‘horizontal’ research funds are often acquired by a faculty from private companies, international agencies, and foundations, which used to give faculty more leeway in its use. The financial management reform since 2012, however, subject the ‘horizontal’ research funds also to the strict rules. Therefore one would expect it will reduce the willingness of faculties to apply for ‘horizontal’ research funds. However, the incentive to apply for ‘vertical research funds hardly change since they are still linked with faculty’s tenure review.

CITS results show that while both vertical and horizontal research funds increase before the reform, the trend of growth of the research funds from these two sources diverged from each other. ‘Horizontal’ research funds grew 12% slower compared to ‘vertical’ research funds and its proportion decreased 5% per year. In addition, universities from different tiers have no significant difference in the response to this policy. Although the “985” colleges and non-“985” colleges have opposite trends before the implementation of the policy, the tightening of these policies has led to a decline in both horizontal funds and its proportions.

Authors

• Wei Ha, Peking University

• Xinyue Zhang, Peking University