Performance-Based Funding for Higher Education: How Well Does Neoliberal Theory Capture Neoliberal Practice?

• In Event: 3429 - Section on Sociology of Education Refereed Roundtables (1 hour)
  In Refereed Roundtable 60min: 10. Higher Education: Administrative Trends and Institutional Effects

Abstract

Neoliberal ideas – whether the new public management (NPM), principal-agent theory (or agency theory), or performance management -- have provided the rationale for sweeping reforms in the governance and operation of higher education. Despite this, little attention has been devoted to how well neoliberal theory illuminates the policy process by which neoliberal policy is enacted and implemented. In this paper, we examine the origins, implementation, and impacts of performance-based funding (PBF) for higher education in the US and elsewhere. Our analysis draws on original research we conducted on the origins, implementation, and impacts of PBF in the US and on our review of the research literature on performance funding, performance management, policy implementation, and organizational monitoring in the United States and many other countries With regard to policy origins, neoliberal theory correctly anticipates the key role that top government officials play in the development of PBF. However, neoliberal theory fails to anticipate the important role of business and of higher education institutions in the formation of neoliberal policies. Neoliberal theory correctly notes the important role of monetary incentives as policy instruments and the obstacles posed by gaming on the part of agents. At the same time, this paper demonstrates that the implementation of PBF also involves the use of other policy instruments as well. Moreover, the performance funding experience points to a host of obstacles beyond gaming to the effectiveness of PBF. Finally, with regard to outcomes of neoliberal policymaking, the paper demonstrates that outcomes fitting the neoliberal focus on organizational effectiveness and efficiency are only weakly produced by PBF, but performance funding is associated with a host of unintended impacts that neoliberal theory ignores.

Authors

• Kevin J. Dougherty, Teachers College, Columbia University

• Rebecca S. Natow, Hofstra University, School of Education