Abstract
ABSTRACT The Italian Higher Education System (IHES) is facing a long and wide-ranging process of reforms. In particular, funding system has been changed to introduce formula-based approaches. Nowadays, the Italian funding system adopts two different formula-based methods to distribute funds. The first introduces a demand-driven scheme, in which students' choices drive the allocation of resources. The second distributes public funds on the basis of performance indicators in teaching and research. This paper aims to answer two questions. Is the attractiveness of a university affected by context variables? Does a relationship exist between the two incentive mechanisms? Research shows a strict relationship between university attractiveness and geographical location. This suggests that contextual factors (e.g., per capita GDP, unemployment rates) play a fundamental role in driving student choices and thus limiting university attractiveness. This analysis of funding schemes highlights the absence of any direct relationship between the two incentives schemes used to allocate funds. Keywords higher education; quasi-market; performance-based budgeting; Italian university.
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