The Politics of Performance Funding in Eight States: Origins, Demise, and Change

Despite the popularity of performance funding among policymakers, only half of all states have ever created a performance funding system for higher education, and these performance funding systems have been surprisingly unstable. Nearly half of the states that established performance funding systems for education eventually discontinued these systems. This report examines the political forces that shaped performance funding policies in eight states. The report begins by contrasting the experiences of six states that established performance funding (Florida, Illinois, Missouri, South Carolina, Tennessee, and Washington) with two states that did not (California and Nevada). It then analyzes the demise of performance funding in four states: Washington, Illinois, Missouri, and Florida. Finally, the report examines how and why two performance funding systems that have lasted to this day―in Tennessee and Florida―have changed over time. In conclusion, the report draws evidence-based recommendations for policymakers. A version of this report was published under the title “Accounting for Higher Education Accountability: Political Origins of Performance Funding for Higher Education” in the Teachers College Record.