Performance funding policies in higher education have had little effect on student outcomes

Performance and cost efficiency concerns have taken center stage in discussions about the funding and oversight of public universities in recent years. One of the primary manifestations of these concerns is the rise of performance funding policies, or policies that seek to directly link state appropriations to the outcomes institutions generate for students. In a study of over 500 four year post-secondary institutions in all fifty states from 1993-2010, Amanda Rutherford and Thomas Rabovsky find that current performance funding policies are not associated with higher levels of student performance and that these policies may in fact contribute to lower performance over a longer period of time. However, more recent policies linked to institutional base funding may produce some likelihood of long-term improvement and require additional attention by scholars and policymakers.