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

Date01 November 2014
Published date01 November 2014
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.
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

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