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COMPARISON OF FORMULA FINANCING AND PERFORMANCE-BASED FINANCING METHODS: THE SAMPLE OF HIGHER EDUCATION

Year 2017, Volume: 8 , 52 - 58, 10.12.2017

Abstract

When the financing of higher education service with
public resources is examined, it is understood that there are two main
allocation methods as traditional and modern. While input criteria are given
importance in traditional methods, output and results criteria have precedence
in modern methods. Formula financing examined in this study is evaluated among
traditional financing methods. On the contrary, performance-based financing is
also among modern financing methods. The formulas and various indicators are
used in the context of both practices. So the related methods are sometimes
confused and perceived as expressing a similar logical framework. However, the
two methods differ significantly from each other. In this study, the similar
and dissimilar aspects of them are analyzed. Thus, examples are given from
higher education service in order to concretize the subject. In this direction,
the aim of study is to compare to formula financing and performance-based
financing and to comprehensively examine the common features and their
differentiating aspects of the related allocation methods.

References

  • Ahmad, A. R., Saripuden, S. ve Soon, N. K. (2014). Analysis of the Higher Education Funding Systems, 24. International Business Information Management Association (IBIMA 2014). 6-7 November 2014, Milan, Italy. Alkaraan, F. & Jaba, A. (2011). Higher Education Budgeting Reform: Towards Efficiency, Effectiveness and Economy. International Higher Education Congress: New Trends and Issues, 2(5), 1135–1141. Benneworth, P., Boer, H. de, Cremonini, L., Jongbloed, B., Leisyte, L., Vossensteyn, H. & Weert, E. de (2011). Quality-related Funding, Performance Agreements and Profiling in Higher Education An International Comparative Study. Centre for Higher Education Policy Studies (CHEPS) University of Twente, The Netherlands. Çekiç, O. (2010). Exploring the Relationship between Incentives-Based Budgeting and Organizational Governance in Higher Education Institutions: A Case Study of a Public University. Uşak University, The Journal of Social Science Institution, 3(1), 83-102. Demirbaş, T. (2009). A New Approach for Allocating Approprıations to State Universities: Performance Funding. Faculty of Economics, Finance Research Center Conferences İstanbul University, Volume: 52. Seri, The Gift Book to Prof. Dr. Şerafettin Aksoy, 80–105. Ecker, B., Leither, K-H. & Frolich, C. (2011). Funding Formulas for Teaching in Public Universities: International Experiences and Lessons Drawn from a Science Policy View. Retrieved from http://www.eua.be/Libraries/Funding_Forum/EUA_Ecker_article_web.sflb.ashx, 21.08.2017). Estermann, T. & Cleys-Kulik, A. L. (2016). Performance-Based Funding of Universities in Europe. International Higher Education, 85, 31-33. Estermann, T., Pruvot, E. B. & Claeys-Kulik, A. L. (2013). Designing Strategies for Efficient Funding of Higher Education in Europe, Define Interim Report. European University Association, Brusels, Belgium. European Commission (2010). Funding Higher Education: A View Across Europe. Lifelong Learning Project N° 142354-LLP-1-2008-1-BE-ERASMUS-ENW, 2010 ESMU. Herbst, M. (2009). Performance-Based Budgeting or Funding, Higher Education Financing Public Universities the Case of Performance Funding. Springer + Business Media, The Netherlands. Hillman, N. W., D. A. Tandberg and A. H. Fryar (2015). Evaluating the Impacts of “New” Performance Funding in Higher Education. Educational Evaluation and Policy Analysis, 37(4), 501-519. Gorbunov, V. A. (2013). Performance Funding in Public Higher Education: Determinants of Policy Shifts. Unpublished PhD. Thesis, Graduate School of Vanderbilt University, Nashville, Tennessee. Jordan, M. M. & Hackbart, M. M. (1999). Performance Budgeting and Performance Funding in the States: A Status Assessment. Public Budgeting & Finance, 19(19), 68-88. Ilyas, E. İ. (2012). Evaluation of Higher Education Financing Mechanisms and a Model Proposal For Turkey, The Turkish Republic. Development Ministry, General Directorate of Social Sectors and Coordination, Publication No:2338, March.
  • Layzell, D. T. & Caruthers, J. K. (1995). Performance Funding at the State Level: Trends and Prospects. Presented in the Annual Meeting of the Association for the Study of Higher Education, Florida, November 2-5. Leszczensky, M., Orr, D., Schwarzenberger, A. & Weitz, B. (2004). Staatliche Hochschulsteuerung durch Budgetierung und Qualitätssicherung: Ausgewählte OECD-Länder im Vergleich. Hannover: HIS GmbH. Orr, D. (2005). Can Performance-Based Funding and Quality Assurance Solve vs Market Conundrum?. Higher Education Policy, 18(1), 31-50. Salmi J. & Hauptman, M. A. (2006). Innovations in Tertiary Education Financing: A Comparative Evaluation of Allocation Mechanism. Education Working Paper Series, No:4. The World Bank. Schmidt E. K. (2011). University Funding Reforms in the Nordic Countries, In University Reform and Consequences in Finland and Japan. Dobson, I. and Maruyama, F. (eds). Anthology. Centre for National University Finance and Management, Tokyo, Japan. Teixeira, P., Biscaia, R. & Rocha, Y. V. (2014). Competition and Performance in European Higher Education: The Role of Funding Instruments. Páginas de Educación, 7(2), 217-233. The Working Group of Finance Ministry (2011). Kaynak Tahsisinde Performans Yönetiminin Esas Alınması-Yükseköğretim Örneği. Publications of Finance Ministry, Ankara. The World Bank (2010). Main Features of Current Funding Policies and Practices, Financing Higher Education in Africa. Washington D.C. Tüğen, K. (2014). Devlet Bütçesi (State Budget). Edition 13, Bassaray Publishing, İzmir. Ziderman, A. & Albrecht, D. (1995). Funding Mechanisms for Higher Education: Financing for Stability, Efficiency, and Responsiveness. World Bank Discussion Paper, No:153.
Year 2017, Volume: 8 , 52 - 58, 10.12.2017

Abstract

References

  • Ahmad, A. R., Saripuden, S. ve Soon, N. K. (2014). Analysis of the Higher Education Funding Systems, 24. International Business Information Management Association (IBIMA 2014). 6-7 November 2014, Milan, Italy. Alkaraan, F. & Jaba, A. (2011). Higher Education Budgeting Reform: Towards Efficiency, Effectiveness and Economy. International Higher Education Congress: New Trends and Issues, 2(5), 1135–1141. Benneworth, P., Boer, H. de, Cremonini, L., Jongbloed, B., Leisyte, L., Vossensteyn, H. & Weert, E. de (2011). Quality-related Funding, Performance Agreements and Profiling in Higher Education An International Comparative Study. Centre for Higher Education Policy Studies (CHEPS) University of Twente, The Netherlands. Çekiç, O. (2010). Exploring the Relationship between Incentives-Based Budgeting and Organizational Governance in Higher Education Institutions: A Case Study of a Public University. Uşak University, The Journal of Social Science Institution, 3(1), 83-102. Demirbaş, T. (2009). A New Approach for Allocating Approprıations to State Universities: Performance Funding. Faculty of Economics, Finance Research Center Conferences İstanbul University, Volume: 52. Seri, The Gift Book to Prof. Dr. Şerafettin Aksoy, 80–105. Ecker, B., Leither, K-H. & Frolich, C. (2011). Funding Formulas for Teaching in Public Universities: International Experiences and Lessons Drawn from a Science Policy View. Retrieved from http://www.eua.be/Libraries/Funding_Forum/EUA_Ecker_article_web.sflb.ashx, 21.08.2017). Estermann, T. & Cleys-Kulik, A. L. (2016). Performance-Based Funding of Universities in Europe. International Higher Education, 85, 31-33. Estermann, T., Pruvot, E. B. & Claeys-Kulik, A. L. (2013). Designing Strategies for Efficient Funding of Higher Education in Europe, Define Interim Report. European University Association, Brusels, Belgium. European Commission (2010). Funding Higher Education: A View Across Europe. Lifelong Learning Project N° 142354-LLP-1-2008-1-BE-ERASMUS-ENW, 2010 ESMU. Herbst, M. (2009). Performance-Based Budgeting or Funding, Higher Education Financing Public Universities the Case of Performance Funding. Springer + Business Media, The Netherlands. Hillman, N. W., D. A. Tandberg and A. H. Fryar (2015). Evaluating the Impacts of “New” Performance Funding in Higher Education. Educational Evaluation and Policy Analysis, 37(4), 501-519. Gorbunov, V. A. (2013). Performance Funding in Public Higher Education: Determinants of Policy Shifts. Unpublished PhD. Thesis, Graduate School of Vanderbilt University, Nashville, Tennessee. Jordan, M. M. & Hackbart, M. M. (1999). Performance Budgeting and Performance Funding in the States: A Status Assessment. Public Budgeting & Finance, 19(19), 68-88. Ilyas, E. İ. (2012). Evaluation of Higher Education Financing Mechanisms and a Model Proposal For Turkey, The Turkish Republic. Development Ministry, General Directorate of Social Sectors and Coordination, Publication No:2338, March.
  • Layzell, D. T. & Caruthers, J. K. (1995). Performance Funding at the State Level: Trends and Prospects. Presented in the Annual Meeting of the Association for the Study of Higher Education, Florida, November 2-5. Leszczensky, M., Orr, D., Schwarzenberger, A. & Weitz, B. (2004). Staatliche Hochschulsteuerung durch Budgetierung und Qualitätssicherung: Ausgewählte OECD-Länder im Vergleich. Hannover: HIS GmbH. Orr, D. (2005). Can Performance-Based Funding and Quality Assurance Solve vs Market Conundrum?. Higher Education Policy, 18(1), 31-50. Salmi J. & Hauptman, M. A. (2006). Innovations in Tertiary Education Financing: A Comparative Evaluation of Allocation Mechanism. Education Working Paper Series, No:4. The World Bank. Schmidt E. K. (2011). University Funding Reforms in the Nordic Countries, In University Reform and Consequences in Finland and Japan. Dobson, I. and Maruyama, F. (eds). Anthology. Centre for National University Finance and Management, Tokyo, Japan. Teixeira, P., Biscaia, R. & Rocha, Y. V. (2014). Competition and Performance in European Higher Education: The Role of Funding Instruments. Páginas de Educación, 7(2), 217-233. The Working Group of Finance Ministry (2011). Kaynak Tahsisinde Performans Yönetiminin Esas Alınması-Yükseköğretim Örneği. Publications of Finance Ministry, Ankara. The World Bank (2010). Main Features of Current Funding Policies and Practices, Financing Higher Education in Africa. Washington D.C. Tüğen, K. (2014). Devlet Bütçesi (State Budget). Edition 13, Bassaray Publishing, İzmir. Ziderman, A. & Albrecht, D. (1995). Funding Mechanisms for Higher Education: Financing for Stability, Efficiency, and Responsiveness. World Bank Discussion Paper, No:153.
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Details

Journal Section Articles
Authors

Gonca Gungor Goksu This is me

Mehmet Emin Altundemir This is me

Publication Date December 10, 2017
Published in Issue Year 2017 Volume: 8

Cite

APA Gungor Goksu, G., & Altundemir, M. E. (2017). COMPARISON OF FORMULA FINANCING AND PERFORMANCE-BASED FINANCING METHODS: THE SAMPLE OF HIGHER EDUCATION. The Eurasia Proceedings of Educational and Social Sciences, 8, 52-58.