Abstract
Japan's government ruled by the Liberal Democratic Party pursued a policy for fostering 'world-class universities', like most of governments in developed and middle income countries. The emergence of a new government ruled by the Democratic Party of Japan in September 2009 may mean a fundamental change in the policy of higher education finance in this country in this respect. In this article, the author examines Japan's higher education policy since the 1990s, focusing on the trials to foster these 'world-class' universities. Facing the rapid growth of the idea of the knowledge-based society, higher education finance of Japan has been relying more and more on science and technology policy rather than higher education policy. At the same time, the internationalization of higher education has become more stressed as an alternative solution under budgetary pressure. The 'world-class university' policy in the last two decades did not lead to a significant increase of public investment in top universities, and, naturally, did not realize the positioning of Japanese universities in the world university rankings at a higher level. Under the new government, access to higher education and direct support to the families in childcare have been given financial priority. Although the value of public investment into science and technology is widely recognized, investment in universities which can provide a high quality education and advanced research is not well-accepted among the general public. Overall, the destiny of the 'world-class university' in Japan is unclear, especially given the uncertain policy environment seen today.
