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Popular but Unstable: Explaining Why State Performance Funding Systems in the United States Often Do Not Persist


by Kevin J. Dougherty, Rebecca S. Natow & Blanca E. Vega — 2012

Background/Context: Performance funding in higher education ties government funding to institutional performance on indicators such as retention, graduation, and job placement. Performance funding can also be found in state K-12 funding policies and higher education quality assurance programs abroad. One of the puzzles about higher education performance funding is that half of the states establishing it later abandoned it.

Purpose/Objective/Research Question/Focus of Study: This study examines the factors that have led many states to drop performance funding for higher education.

Research Design: This qualitative case study contrasts the experiences of three states that dropped performance funding in whole or in part (Missouri, Washington, and Florida) and a fourth (Tennessee) that has retained it more than 30 years.

Discussion: Our analysis is based on documentary records and extensive interviews with higher education officials, legislators and staff, governors and advisors, business leaders, minority group leaders, researchers, and outside consultants. Our findings concur with but also go beyond prior analyses of the demise of state performance funding systems. We concur that higher education opposition played a key role in this demise, stimulated by a perception of inadequate consultation with higher education institutions, use of performance indicators that institutions found invalid, high implementation costs to institutions, and erosion of campus autonomy. At the same time, our analysis turned up other causes of higher education opposition to performance funding that were not discovered by previous studies. A major cause of higher education opposition was the downturn in state finances in the early 2000s, which led institutions to focus on preserving their core state funding and giving up performance funding. Higher education opposition was also provoked if performance funding took the form not of adding to existing state funding but instead holding back a portion of the state appropriation and requiring institutions to earn it back through improved performance. These findings agree and disagree with theories and findings in the research literatures on policy termination and program sustainability.

Conclusions/Recommendations: If its advocates are to create a sustainable basis for state performance funding, they must find ways to insulate its funding from the ups and downs of the state revenue cycle, better secure the support of public institutions, and expand its breadth of political support by reaching out, for example, to business and to social groups driven primarily by the values of educational equality rather than educational efficiency.



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Cite This Article as: Teachers College Record Volume 114 Number 3, 2012, p. 1-41
http://www.tcrecord.org ID Number: 16313, Date Accessed: 9/21/2014 10:04:06 AM

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About the Author
  • Kevin Dougherty
    Teachers College, Columbia University
    KEVIN DOUGHERTY is associate professor and senior research associate, Community College Research Center, Teachers College, Columbia University. His research interests include performance accountability in education, immigration and educational opportunity, the role of higher education in economic development, and the impact of information disparities on student opportunity in education. His recent publications include “Undocumented Immigrants and State Higher Education Policy: The Contrasting Politics of In-State Tuition Eligibility in Texas and Arizona,” Review of Higher Education, 34(1) (Fall 2010) (with H. Kenny Nienhusser and Blanca E. Vega) and “U.S. Community Colleges and Lessons for British Further Education Colleges,” in Tony Dolphin and Jonathan Clifton (Eds.), Colleges 2020 (London: Institute for Public Policy Research, 2010).
  • Rebecca Natow
    Teachers College, Columbia University
    REBECCA S. NATOW is currently a doctoral candidate, graduate assistant, and instructor in the Higher & Postsecondary Education Program at Teachers College, Columbia University. She is also a research associate at the Community College Research Center at Teachers College. Research interests include the politics surrounding the development of higher education public policy at the state and federal levels.
  • Blanca Vega
    Teachers College, Columbia University
    BLANCA E. VEGA is currently a doctoral candidate in the Higher & Postsecondary Education Program at Teachers College, Columbia University. Research interests include race and immigration and their impact on higher education achievement.
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