Study Of The Operational Mechanism Of Education Performance Funding

The contradiction between the financial decline and the scale enlargement of higher education is looming large. The public is paying more attention to the accountability of higher education institutions. The public begins to examine the quality and efficiency of higher education. The combination of evaluation and funding in international higher education arises. Since 1980s, a lot of countries have been trying performance-based funding. The resource utilization of our higher education is ineffective and there is little improvement of quality of higher education. Our country proceeded with financial reform in 2002, which could be an opportunity to try performance funding within the budget, pointed out by Luting Ma, the director of Higher Education Research Office of National Center For Education Development Research. Within the system assumption, the research of its mechanism is of great importance. On the one hand, it can provide some experience to build performance funding model and promote the reform of financial appropriation system of higher education. On the other hand, it can encourage reasonable competition for resource in higher education institutions and help to increase the efficiency of using resource.The structure of this thesis is arranged as follows: with the "Principal-Agent" of institutional economics as its theoretical base and performance funding experiences and lessons of higher education in some OECD countries as its practical one, the mechanism of performance funding of higher education is being analyzed as its core part. The author concentrates on analyzing the factors of performance funding mechanism as well as their relationship. How to establish the performance funding mechanism of higher education would be discussed regarding different levels and types of higher education institutions with our particularity. Finally it would be discussed about the feasibility, difficulties and some suggestions of performance funding of higher education in our country.The author starts from adverse selection and moral hazard in the "Principal-Agent" theory, proceeds with outcome measurability, outcome uncertainty and goal conflict in agent variables. The mechanism is divided into goal mechanism, motivating mechanism, evaluation mechanism and ensuring mechanism according to operation process. First, the goal is to ensure external accountability, what's more important, institutional improvement. Second, motivating mechanism involves encouragement and competition, including (1) making performance funding a part of institutional base budgets, (2) funding amount with 5%-10%, (3) non-competition funding, (4) the government's adoption of mandated/not prescribed method and establishment of the agency. Third, evaluation mechanism includes (1) The success criteria consisting of performance standard and institutional improvement. (2) After core indicators being set up, indicator system and its weight should be worked out according to varied levels, types and missions of different universities and colleges. (3) Evaluation frequency should be 3-5 years once. Finally, ensuring mechanism includes (1) keeping stability of performance funding plan. (2) promoting familiarity of the faculty with performance funding. (3) coping with non-strategy response from institutions. (4) guaranteeing the clarity of the implementation of the plan. (5) promoting universities and colleges to combine the outcome with the plan and budget. The implementation of performance funding in China is of great importance and feasibility, our government should change the conception, make fully use of market mechanism, try performance funding in higher education and extend achievements gradually to larger area. Then the government should ensure the performance funding systematically and legally and set up a transparent, fair, standard and effective conditions for its implementation.