Support for Performance‐Based Funding: The Role of Political Ideology, Performance, and Dysfunctional Information Environments

• Date: 01 November 2014
• Published date: 01 November 2014
• Author: Thomas Rabovsky
• DOI: http://doi.org/10.1111/puar.12274

Thomas Rabovsky is assistant

professor in the School of Public and

Environmental Affairs at Indiana University,

where he teaches public management. His

research largely focuses on accountability,

performance management, managerial

values and decision making, and higher

education policy.

E-mail: rabovsky@indiana.edu

Support for Performance-Based Funding: The Role of Political Ideology, Performance, and Dysfunctional Information Environments 761

Public Administration Review,

Vol. 74, Iss. 6, pp. 761–774. © 2014 by

The American Society for Public Administration.

DOI: 10.1111/puar.12274.

Thomas Rabovsky

Indiana University

As performance-based mechanisms for accountability

have become increasingly commonplace in the public

sector, it is apparent that administrative reactions to these

reforms are central in determining their ef‌f ectiveness.

Unfortunately, we know relatively little about the factors

that drive acceptance of performance-based account-

ability by administrative actors.  is article employs data

collected from an original survey instrument to examine

the perceptions of presidents at American public colleges

and universities regarding performance funding.  e

author f‌i nds that acceptance of performance as a basis for

funding is driven by a variety of factors, including the

partisanship of the state legislature, organizational per-

formance (measured by institutional graduation rates),

dysfunction in the external information environment,

and the political ideology of university presidents.

Why do some agency leaders and public

managers see accountability ef‌f orts as

appropriate and legitimate, while oth-

ers ardently oppose performance-oriented reforms?

Considerable research on performance-based account-

ability has concluded that attempts at implementing

performance regimes ef‌f ectively hinge largely on the

extent to which agency leaders see these ef‌f orts as

legitimate and appropriate (Dull 2009; Franklin 2000;

Meier and O’Toole 2006; Moynihan 2008).  ese

actors are crucial in determining the success or failure

of accountability policies, for a couple of reasons.

First, they often have considerable discretion about

the extent to which internal rewards and sanctions

(both material and symbolic) are well aligned with

the goals of external accountability ef‌f orts. Second, as

organizational leaders, they can play a critical role in

shaping the way that employees learn about and per-

ceive these policies. Previous research has concluded

that approval and support for accountability ef‌f orts

on the part of organizational leaders represents an

important precedent that must be met for these poli-

cies to work (although it should be noted that there

are certainly many other conditions that contribute

to the success or failure of performance management

regimes) (Dull 2009; Kroll 2013; Moynihan 2008;

Moynihan and Pandey 2010). And yet we know very

little about the factors that inf‌l uence administrative

leaders’ perceptions of these policies.

One area in which this discussion has recently become

salient is higher education (McLendon, Hearn, and

Deaton 2006). As tuition rates have skyrocketed and

the American economy faces increased pressure from

the international arena, American universities have

struggled to satisfy demands for improved perform-

ance.  is has caused a signif‌i cant shift in the way

that many states approach the need for accountability

and transparency with regard to higher education.

Whereas policy makers a generation ago were often

willing to take a more passive and hands-of‌f approach

to regulation and oversight of public universities,

today, there are increasing demands for universities to

be held accountable for performance, particularly with

respect to costs and undergraduate student outcomes

(Zumeta 2001).

In terms of state-driven accountability policies, this

trend toward performance management has largely

manifested itself through budgetary reforms and

increased information reporting requirements. In

some cases, this has involved relatively superf‌i cial and

symbolic attempts to gather and publicize information

about university performance, but in others, this has

resulted in a shift toward the adoption of perform-

ance-funding policies that are designed to directly tie

institutional funding to benchmark indicators on stu-

dent outcomes (Burke and Minassians 2003).  ese

performance-funding policies have been quite con-

troversial and garnered considerable attention from

academics and practitioners alike, but there remain

several questions about their ef‌f ectiveness (Aldeman

and Carey 2009; Dougherty and Reddy 2011; Herbst

2007; McLendon, Hearn, and Deaton 2006). One

of the major criticisms of performance funding in

higher education is that despite relatively widespread

popularity (at least among state lawmakers), many of

these policies have proven to be unstable and are often

either discontinued or dramatically altered after only

Support for Performance-Based Funding:  e Role

of Political Ideology, Performance, and Dysfunctional

Information Environments