Abstract
This chapter focuses on the multiple objectives and dilemmas surrounding resource allocation in higher education. We discuss the politics of funding higher education and argue that the NPM form of governance is meeting with more and more criticism, and making way for a more pragmatic approach to funding policies. Our argument is that linear thinking, where change in declared beliefs translates directly into practice, is beyond reality. In practice, the dilemmas around funding higher education are usually resolved not by means of a rational design framed within a clear political belief system, but rather by means of a variety of funding instruments, often inspired by competing governance paradigms.
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