In the two years since Japanese national universities were reorganized into independent administrative corporations, government grants for their operating expenses (personnel and equipment costs) have been slashed by 1 percent each year.
Under the new system, national universities make budgetary requests to compete for grants for "special education and research expenses." They also vie for outside funds for scientific research, research on behalf of industries, and scholarships. For operating expenses, universities also depend on tuition and revenues from attached hospitals.
Government policy calls for increasing the proportion of competitive grants in national university budgets, but this is likely to expand the financial gaps between universities.