ABSTRACT
In the United States, accountability has always been high on the political agenda. Therefore, one would expect to come across many examples of PBF approaches in the different states. Indeed, in a study carried out in 1996 by the State Higher Education Executive Officers (SHEEO), it was concluded that ‘performance-based budgeting is the most significant trend in state budgeting’. In a more recent study by the SHEEO (Burke & Serban, 1998) it was shown that PBF and PB2 approaches are gaining in popularity in the different states of the US (see Table 43). In 1998, of the 50 states covered, half use a type of either PBF or PB2, or a combination of the two. However, with the exception of Tennessee, where from 1981 a PBF has
3 4 5 6111 7 8 9 10 1 2 3111 4 5 6 7 8 9 20111 1 2 3 4 5 6 7 8 9 30111 1 2 3 4 5 6 7 8 9 40111 1 2 3 4 45 46 47 48 49
been in use (see Banta et al., 1996), the other states (such as Florida, Missouri, Minnesota) have experimented with PBF or PB2 for at most five years. Earlier, we noted that the US research funding method is the most obvious example of a highly competitive and performance-oriented system. Federal agencies like the NSF, the National Institutes of Health, and the Department of Defence award the bulk of fundamental research funds for American universities and colleges. In fact, unlike their European counterparts, the American universities do not receive substantial amounts of funds as core funding for basic research from their legislatures. However, some states incorporate an allowance for research in the funding rates applied to student numbers in the enrolment-based formulas that frequently underlie the basic grants to the universities. The universities in the US therefore have to compete for the bulk of their research funding, whereas many European universities often receive historically based allocations for research from their governments or funding councils. Although there are many states that use PBF or PB2 approaches, the amount of funds that is tied (directly or indirectly) to results is relatively small, and usually does not exceed 5% of the institutional allowance. South Carolina is the only state where the legislature has expressed the intention to allocate l00% of state higher education funding on the basis of institutional performance on 37 (!) specific indicators. In the year 2000, 35% of state funding in South Carolina was based on a large number of performance indicators, in nine categories. Most US states, however, adopt performance measures primarily for accountability purposes or informing students about higher education; they do not (yet) use them for funding decisions.
