General description

This paper analyses the adoption of some Performance Based Funding Policies (PBF) throughout higher education (HE) sector within four Eastern European countries (Bulgaria, Romania, Poland, and the Czech Republic). The main aim of this paper is to showcase transitional interests for Vietnam as it undertakes PBF activities. Like Vietnam, Eastern European countries have existed in a pre and post transitional state (struggling with the collapse of the Union of Soviet Socialist Republics (USSR) (ETF; Harman et al., 2010). Since the revolutions and fall of Communism in 1989, Eastern European countries have transformed HE practices and procedures through an ‘opening up’ process (Dobbins and Knill, 2009). Integration and co-operation goals within the European Union ensured that many Eastern European countries participated in, for example the Bologna Process and Lisbon Strategy. As such a common European HE strategy with “transparency, quality, growth, efficiency and excellence” was created (Jongbloed, 2008: p3). The influence of western HE processes and strategies have resulted in steady institutional development, academic improvement and clear governance policies within Eastern European universities (Dobbins and Knill, 2009).

Three primary transitional interests are evident in the Eastern European adoption of a mix of allocation including both funding formulas and PBF (Dobbins and Knil, 2009; Jongboed, 2008, Eurydice, 2008). First, the use of some performance indicators like student success rates in allocation of funding for teaching and operations in the Czech Republic has been  one of the financially efficient tools in HE system. Second, the new strategy for HE in which the direct public funding for universities based on performance contracts in Romania assured strategic objectives. Third, the award of research funding based mainly on institutional performance in the area of quality of research activities in Poland achieved better results.

In the 1990s Vietnam emerged as a developing country and has undergone a transition from highly centralised economy to a regulated market economy. Subsequently the Vietnamese HE system has been adopting a new strategy and structure. However, its funding mechanisms are still based on the traditionally negotiated budget and block grant which is lacking in transparency because of a centralized rule-based governance mechanism (MOET, 2012).

The objective of the study

This aim of the pilot PhD study is to account for a range of Vietnamese HE perspectives on PBF. In part the paper showcases how such views and opinions are associated with practices undertaken in Eastern European countries during a period of transition from the 1990s. Therefore this paper seeks to make a contribution to understanding of HE transition and the market mechanisms in Vietnam.   

This pilot study seeks to answer two specific questions:

1. What have been the key implications/consequences of the adopting Performance Based Funding policies of four Eastern European countries (Bulgaria, Romania, Poland, and Czech Republic)?
2. How can the identifiable implications impact upon Vietnam’s s adoption of Performance Based Funding policies in higher education?

Theoretical framework:

This paper applies the PBF concept as outlined by Salmi and Hauptman (2006). They defined PBF as the efficient new funding allocation mechanism in which state financial resources allocation is based on institutional performance, results, outcomes and outputs. PBF usually has four key aspects: Performance contracts, Performance set asides, Competitive funds, and Payments for results. Compared with the traditional allocation based on input resources, the PBF polices are expected to increase access, equity, efficiency and transparency in HE (Salmi and Hauptman, 2006; WB, 2010; Jongbloed, 2010). However, the transition from traditional to PBF might face strong obstacles both inside and outside any HE (such as those in Eastern Europe as well as Vietnam) because their governance structures and management have traditionally been lacking reliable performance indicators (Hendel, 2005).

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