The Impact of Performance-Based Funding on Higher Education Institutions

This research evaluates the impact of performance-based funding (PBF) on higher education institutions in Pakistan, employing a mixed-methods framework. The researchers selected 12 universities across four provinces (public and private) on which the Higher Education Commission (HEC) had acted regarding the 2019-2023 PBF implementation policy. The researchers collected and analyzed documents and primary data for the study from 360 university administrators, faculty, and HEC officials through a survey, as well as in-depth and focus group interviews. According to published research output, PBF implementation was reported to increase the graduation rate by 43%, as well as 28% and 35% increases in faculty qualifications. However, the qualitative data collected highlighted issues of compliance, as the PBF facilitators noted a lack of academic autonomy, excessive administrative burden, and institutional gaming. The qualitative data revealed the themes of strategic compliance, sustainability, the trade-off between quality and quantity, resource allocation, and stakeholder opposition. Changes to PBF dictated a positive shift in institutional performance. Thus, policy change should target the periphery to mitigate the unintended adverse effects of PBF on the long-term enhancement of quality within educational institutions.