Financing Public Universities: The Case of Performance Funding

Financing Public Universities addresses newer practices of resource allocation which tie funding to indicators of performance. The gist of these efforts is to raise the quality of institutional systems. Performance-based budgeting and funding of public universities is part of broader efforts to reform public management, and it is being promoted and implemented by various government agencies around the globe. In particular, European universities with their normally strong governmental ties, or higher education systems molded on European universities, are prime targets of such reforms. Performance funding has made its inroads in attempts to grant university systems managerial autonomy: autonomy was to be granted in exchange for funding modes which are tied to the measurement of performance indicators. Unfortunately, performance-based budgeting or funding measures cannot meet the various expectations: they do not raise the quality of teaching or learning; they do not raise research performance; they take back a great deal of managerial autonomy which is commonly judged to be essential for the well being of higher education institutions, in particular research universities; and they act as automata in place of proper governance and management. Financing Public Universities addresses policy makers, higher education administrators, scholars and students of higher education management. After an introduction to the theme and to the book (Chapter 1), Financing Public Universities covers the evolvement of mass higher education and the associated curtailment of funding (Chapter 2), the public management reform debate (Chapter 3) within which performance-based budgeting orfunding evolved (Chapter 4), sketches alternative governance and management modes which can be used instead (Chapter 5), and epitomizes inertia or challenges (Chapter 6). Four appendices cover more technical matters, such as a comparative exposition of the research performance of universities by nation (Appendix C) and examples of funding systems in the UK and in the USA (Appendix D).

Review :
'Marcel Herbst has produced a penetrating and thorough analysis of the current enthusiasm in many countries for employing performance funding as a tool for increasing the accountability and quality of their higher education systems. His work is based on an impressive coverage of the literature on this topic and, particularly important, places the interest in performance funding within the context of the changing and conflicting views of governmental steering and reform of higher education. It is the most insightful and comprehensive examination of this topic available. This book is a "must read" for both governmental policy makers concerned with higher education and college and university leaders.' Frank A. Schmidtlein, Associate Professor of Higher Education (Emeritus), University of Maryland, College Park, MD, USA Herbst is widely knowledgeable across national higher education systems and his analysis of the weaknesses of European university scene is penetrating and challengin 'Marcel Herbst has produced a penetrating and thorough analysis of the current enthusiasm in many countries for employing performance funding as a tool for increasing the accountability and quality of their higher education systems. His work is based on an impressive coverage of the literature on this topic and, particularly important, places the interest in performance funding within the context of the changing and conflicting views of governmental steering and reform of higher education. It is the most insightful and comprehensive examination of this topic available. This book is a "must read" for both governmental policy makers concerned with higher education and college and university leaders.' Frank A. Schmidtlein, Associate Professor of Higher Education (Emeritus), University of Maryland, College Park, MD, USA Herbst is widely knowledgeable across national higher education systems and his analysis of the weaknesses of European university scene is penetrating and challenging. Many of his solutions make uncomfortable reading but, if the European higher education area wants to keep up with world competition, they will have to be acted upon. Professor Michael Shattock, Institute of Education, University of London The author of this book is a former university administrator that finally became a researcher. This non usual background provides the author a special understanding of the university management but also, as a privileged observer, a profound insight on the university life. This book is a consequence of his double perspective. The author makes a deep analysis of performance funding, but in fact, the book is something else: it is a general and excellentoverview of how universities work around the world. Surprisingly to some extent, bearing in mind his managerial background, the author is wisely in favour of taking cautiously the increasing managerial trends in the university world. Marcel Herbst' book is a basic tool for understanding universities in a period of reforms and transformations." JosA(c)-GinA(c)s Mora, Technical University of Valencia, President of the EAIR In his book "Preparing for the Twenty-First Century" (Fontana Press,1994) Paul Kennedy wrote: "If my analysis is roughly correct, the forces for change facing the world could be so far-reaching, complex and interactive that they call for nothing less than the reeducation of humankind." If we look today, in the first decade of the 21st century, at our troubled world menaced by serious problems but also full of opportunities, it becomes obvious that education and knowledge are playing a key role indeed. The university is of paramount importance to bring about the necessary changes in our respective societies. However, in order to fulfill this objective, the university will have to change itself. Perhaps the most important forces which affect higher education are the needs of the citizenry, the demands of a growing knowledge society, and the scarcity of available resources. Together, they lead to the request for higher productivity and meaningful new activities in research and education. But before the university can creatively respond to societal requests, it will have to learn to fight its own complacence and inertia. The present compendium by Marcel Herbst is of great help for all those who are involved in reflecting about and shaping thefuture of higher education and research. The reader will find an abundance of information and many comparisons of existing systems as well as suggestions for future developments. The author offers the reader not only a description of the actual situation. The reader will also find a wealth of challenging personal views which may help his or her own process of reflection. Jakob NA1/4esch, President emeritus, Swiss Federal Institute of Technology in Zurich (ETH ZA1/4rich)