I read actually here on HN some years back (or was is Slashdot?), a good explanation of how Japanese undergrad programs have a similar problem about inflation,

I read actually here on HN some years back (or was is Slashdot?), a good explanation of how Japanese undergrad programs have a similar problem about inflation, manifested by contrast in why they are very focused on taking attendance at college courses. Anyone who gets into a top Japanese university by definition has done well up to that point. And the university has an obvious interest in maintaining (or making it seem to outsiders / employers / future students) that their graduates are top ranked. So it would not be good to be having 1/2 your class "underperforming". Therefore grades are inflated and as a result students often just phone it in. (also knowing that their careers ahead are mostly set if they minimally apply themselves and show up) So at that point, all they can do is mostly grade people on the small differences in performance, monitor their attendance to catch and flunk out the worst behaviors (completely skipping class), and live with the system they have. I would be glad to find/read that post again but I think I've lost where it came from...