Performance-based public funding of higher education: European experience and practice of Ukraine

Abstract

Purpose. The purpose of the article is to investigate the effectiveness of higher education funding in Ukraine and the EU member states in the face of global challenges and national reforms, as well as to substantiate measures to implement the performance-based approach in the medium term. Methodology of research. The following methods are used to carry out the study: historical and logical – in the study of contemporary challenges for education in the global environment, statistical and generalization – in assessing the domestic practice of higher education financing, comparison – in the analysis of financial and demographic pressure on higher education institutions in Ukraine and EU, synthesis – to substantiate the effects of implementing the performance-based approach for the allocation of public funding to the higher education system and priorities for its reformation in Ukraine. Findings. In order to investing in skills and capacity-building, needed to achieve cost-effectiveness, efficiency, and quality, higher education requires sustainable and adequate public funding. The article substantiates that the current challenges for education systems in the global environment are political and regulatory changes, globalization trends, stakeholder expectations, digitization, nature and structure of the labour market. The feasibility of using a performance-based approach in Ukraine in comparison to other mechanisms of public funding allocation in higher education has been proved, the key performance indicators used in the EU member states have been uncovered also potential effects of implementation have been identified. Originality. The effectiveness of public funding in Ukraine in comparison with EU member states has been determined. This allowed substantiating a set of recommendations for domestic higher education institutions concerning their adaptation to the long-term financial and demographic pressures. The key principles of the public policy, oriented at achieving the effects of economy and efficiency in the sphere of allocation and use of public funds in the higher education system, have been substantiated. Practical value. The proposed recommendations put forward for implementation can be used in reforming the system of higher education funding in Ukraine and will help to improve the performance of educational institutions. Key words: system of higher education funding; public funding of higher education; higher education effectiveness; performance-based funding in higher education.