From financial autonomy to performance-based funding for sustainable development financing of higher education institutions in Uzbekistan

Uzbekistan's higher education institutions (HEIs) face a funding challenge driven by expansion and the need to enhance research and infrastructure amidst budget constraints. A policy-oriented model, incorporating the Financial Autonomy and Development Capacity Index (FADCI), has been developed to analyze the shift from cost-based to performance-based funding. This model suggests that the future effectiveness of performance-based funding in promoting sustainable development financing is contingent upon the level of institutional autonomy.

Why it matters

The evolution of funding mechanisms for higher education has significant implications for national development, research capabilities, and human capital formation. Ensuring that funding reforms genuinely promote sustainable development requires careful consideration of the interplay between performance metrics and institutional autonomy, influencing long-term strategic planning for educational systems.

Key insights

• Uzbekistan's HEIs are expanding, necessitating increased funding for access, research capacity, and infrastructure.
• Public budgets for HEIs remain constrained despite growing demands.
• The country is transitioning from a cost-based funding model to a rating-linked performance funding system for HEIs.
• A new model, the Financial Autonomy and Development Capacity Index (FADCI), integrates revenue autonomy, expenditure flexibility, research financing, infrastructure capacity, and governance readiness.
• The FADCI was corroborated by expert weighting and piloted on six HEIs.
• Analysis indicates that performance-based funding, expected from 2027, will only foster sustainable development financing if sufficient institutional autonomy is granted.

Source

Frontiers in Education — https://www.frontiersin.org/articles/10.3389/feduc.2026.1920875