Higher Education Performance Funding in Mauritius: A Tool for Accountability, Efficiency and Effectiveness

Higher education is an important industry in knowledge creation and in contributing to a country's economic progress. This paper investigates the motivation behind the introduction of a performance-linked funding mechanism for the HE sector in Mauritius. The new public management policy and principal-agent theory have been used as the theoretical framework to guide the study. A literature review has been carried out to determine the role of performance funding in enhancing efficiency, effectiveness, and accountability in HE. A document search browsed through the current accountability and reporting framework of Mauritian public bodies. The existing fund allocation mechanism has been examined to provide a broad picture of the financing structure of HE. An in-depth interview of the main policy actors with a thematic analysis completed the investigation. The findings show that HE in Mauritius is faced with various challenges: equitable distribution of funds, increasing costs, declining student population, gaps in the accountability and reporting framework, financial sustainability, program relevance, and duplication of offers. Performance funding aims to address these challenges by linking funding to expected outcomes and steering the sector for more efficiency and effectiveness. Since there are few studies on PF in SIDS, this paper provides insights into its benefits in the context of small nations. It is relevant and timely to guide policy leaders in the formulation of performance-linked funding models for small HE systems.