Can you find me articles about how the public sector (typically a state) fund higher education institutions? They may fund based on the number of students (input model) or based on the number of graduates (output model). In Finland there are more than ten output-based measures that the Ministry uses when it allocates funding for the higher education institutions. The purpose is to increase incentives to shorten the length of study and increase the number of graduates.
In Russia financing of educational institutions is carried out generally by the state. The principles periodically change. But the last considers two main factors: a GPA of the unified state examination at going to the university (the it is higher than a point, the there are more than means) and indicators of printing activity (number of articles and an indicator of a quoting in the Scopus and Web Of Science bases)
Dear Juha, are you aware of indicator B2 in the 2014 OECD Education at a Glance report (http://www.oecd.org/edu/Education-at-a-Glance-2014.pdf)?
In most of the developing countries, Higher Education budget is a small part of total education budget. The total education budget is in the range of 6 to 10% and varies from country to country. The allocation of funding then is decided on factors like number of students admitted (as the number of seats are fixed), number of institutions of higher education, and geographical area they are located in. Apart from there are separate allocation under different scheme when the governments focus on special thrust areas of research, thrust areas of economic development etc.
In total, there is not a single formula which everyone follows, but the broad principle is number students admitted every year for a higher educational program at undergraduate, graduate and doctoral levels. Majority of higher education from graduate and doctoral levels are with private (profit making) and self-financing universities / higher education institutions. Even government funded higher education institutions charges hefty tuition for graduate and doctoral degree program. and uses this money to fund their development projects which are starving for government funds. Many other government universities use tuition to fund and promote research.
It is a worthwhile research project to study the funding models used by developed and developing worlds.
In some developing countries, higher education institutions are funded mainly by the heavy tuition fees which the students pay. The institutions collect donations also from some rich persons or agencies. The governments give very little money but they take much more money from the institutions under the name of “monthly taxes”. Of course, the staffs of the institutions receive nothing from the governments in terms of services or old age salaries. This is one of the major reasons behind the existence of low quality higher education in the developing countries.
I agree with respected Professor Zafar Husain; and research on funding models and then comparison between developed countries and developing countries would be of great worth.
This book may be useful. The full text can be obtained from springer:
Herbst, M. (2009). Financing public universities: The case of performance funding. Dordrecht: Springer