Does Institutional Performance Matter under Competition-Based Funding for Higher Education in East Asia? A Comparative Study in Korea and Taiwan

Neoliberalism was widely adopted both in South Korea and Taiwan in the mid-1990s. With governmental reforms, both countries adopted variants of competition-based funding mechanisms for higher education. This funding mechanism has been widely applied in most funding allocations for higher education in Korea from 2003 to 2017 and in Taiwan from 2004 to 2015. This study investigates whether competition-based funding is based on institutional performance rather than on traditional funding approaches such as budget history-based and student enrollment-based approaches. This study collected institutional funding data from 142 four-year universities in Korea and 100 four-year universities in Taiwan. This study found that funding is mostly contingent on the number of students, especially undergraduate students in Korea, and on prior budget history in Taiwan. This implies that although competition-based funding is widely applied in Korea and Taiwan, traditional factors such as student enrollment and budget history still influence funding decisions. However, this study also found that institutional performance is established in both countries' government funding mechanisms. Institutional performance accounted for 27.6% in Korea in 2017, and for 16.7% in Taiwan in 2015. This study further discusses side effects brought by the funding scheme of both countries.