Performance-Based University Funding and Program Closure Risk

Public higher education systems increasingly tie operational revenues to quantitative output metrics to enforce institutional accountability and transparency [1]. This steering mechanism reshapes university resource allocation by rewarding specific outcomes such as degree completion, rapid student throughput, and external research revenues [5]. However, the institutional pressures created by performance-based funding alter internal budgetary priorities, compelling university leaders to evaluate academic programmes based primarily on direct revenue generation rather than broader scholarly value [3].

Under these fiscal constraints, academic units that produce lower commercial margins or experience slower completion trajectories face heightened risks of severe retrenchment or total dissolution [4]. Disciplinary areas such as the liberal arts, humanities, and fundamental theoretical disciplines frequently become targets for elimination when managerial strategies adopt corporate restructuring techniques to balance institutional budgets [7]. This commercialized orientation introduces critical structural fragilities, threatening comprehensive curricular offerings and destabilising the traditional social compact of higher learning [6].

Furthermore, performance-based regimes often exacerbate institutional stratification, penalising regional and mission-specific universities that serve diverse student cohorts with complex academic pathways [8]. When funding allocations penalise institutions for lower completion metrics, university administrations frequently eliminate vulnerable departments to preserve core funding allocations [2]. This creates a systemic tension between formulaic state accountability instruments and the preservation of disciplinary pluralism across national higher education landscapes [3].

This dissertation evaluates how outcomes-based funding formulas drive academic programme closure and departmental restructuring in public universities [5]. By synthesising comparative policy literature and institutional governance frameworks, this inquiry examines the mechanisms through which fiscal metrics generate programmatic vulnerability [1]. Ultimately, this research provides evidence-informed alternatives to assist policymakers in safeguarding essential academic fields while maintaining rigorous institutional accountability [7].