A PHASED ECONOMIC MODEL FOR PROGRAM-BASED (PERFORMANCE-ORIENTED) BUDGETING OF PUBLIC HIGHER EDUCATION INSTITUTIONS IN A TRANSITIONAL ECONOMY

Abstract

This article develops an economic model for the transition of public higher education institutions to a program-based (performance-oriented) budgeting system in the context of a transitional economy. The study proposes an economic and mathematical funding model in which the amount of allocated funding consists of a baseline allocation and a performance-based component linked to an integrated performance index. A four-stage implementation model is substantiated, providing for the gradual increase in the share of performance-based funding. A comparative analysis of international experience is conducted, and the proposed model is adapted to the specific characteristics of a transitional economy. The findings offer a systematic approach that links public budget allocations to educational quality and institutional performance, minimizes financial risks, and enhances the efficiency of resource utilization.