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Impacts of performance-based accountability on institutional performance in the U.S.

Abstract

In the 1990s, most US states adopted new forms of performance-based accountability, e.g., performance-based budgeting, funding, or reporting. This study analyzed changes in institutional performance following the adoption of these new accountability standards. We measured institutional performance by representative education and research indicators—graduation rates and levels of federal research funding. We collected data from 1997 to 2007 and used a hierarchical linear modeling growth curve analysis. The main finding was that states which adopted performance-based accountability did not see a noticeable increase in institutional performance. In addition, we highlighted a critical policy issue—whether state and institutional factors contribute most to institutional performance in higher education.

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Fig. 1

Notes

  1. Resource dependence theory explains why and how higher education responds to the external environment. Neo-institutionalism, on the other hand, explains why and how higher education maintains its value, belief, and culture, and thus explains the stability of higher education. Both these organizational theories provide insights into the impacts of performance-based reforms as well as organizational change from different perspectives.

  2. Brennan and Shah (2000) proposed the impact mechanism to explain the impacts of quality assurance on higher education institutions. The impact mechanism is introduced in this article for discussing the impacts of policy initiatives on institutional performance because the model explains the impacts of reform policy in general.

  3. The excluded 33 institutions are mostly branch campuses though they have institutional identification in NCES database, and did not report data on institutional performance and/or data on the independent variables considered in this study.

  4. Many federal contracts and grants are awarded over a multi-year period. Using multi-year figures would result in apparent instability in funding, because the institution would appear to be awarded the total dollar amount in one year, but nothing in the next years. Since the available data do not specify length of grant period, a more accurate annual measure would be the expenditures of federal grant monies—not the funding itself. Thus, research performance in this study is federally funded research expenditures.

  5. We included only performance funding and budgeting programs, and excluded performance reporting because most of states adopted performance reporting (in Burke and Minassians’ survey, 46 states adopted performance reporting in 2003) and there is not enough variance to compare the program effects between the states with and without the program.

  6. The results were identical when we measured research performance by the number of research publications, an alternative measure of research performance (the results were not reported in this paper).

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Acknowledgments

I thank anonymous reviews for their helpful comments. Also, I thank Prof. Sande Milton at Florida State University and Prof. Lynn Ilon at Seoul National University for their insightful comments on the draft of this paper.

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Correspondence to Jung Cheol Shin.

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Shin, J.C. Impacts of performance-based accountability on institutional performance in the U.S.. High Educ 60, 47–68 (2010). https://doi.org/10.1007/s10734-009-9285-y

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Keywords

  • Policy impact
  • Performance
  • Accountability
  • Graduation rate
  • Research fund
  • Program effects