Implications of the changing funding base of public universities

Abstract

As mixed-economy organizations, public universities provide an excellent opportunity for examining the impact of a changing funding base upon institutional priorities, as measured by resource allocation among activities. Two theoretical perspectives were drawn upon in modeling resource allocation in public universities, resource dependency theory and economic theory. By analyzing resource allocation both from the standpoint of real per-student expenditures and expenditure shares, several consistently-significant, positive relationships were found to exist: that between governmental appropriations and instruction; that between gifts, grants, and contracts and research; that between tuition and fees and student services; that between governmental appropriations and plant maintenance and operation; and that between tuition and fees, and gifts, grants, and contracts and scholarships and fellowships. Furthermore, these same positive relationships were found to persist when an explicit analysis of change was undertaken. While the study focused primarily on changes in resource dependencies as the primary predictor of changes in resource allocation patterns, alternative explanations could not be ruled out.