Strings attached? Linking Historically Black Colleges and Universities public revenue sources with efficiency

ABSTRACT

Historically Black Colleges and Universities (HBCUs), a set of US higher education institutions historically tasked with educating African–American students, receive both state and federal funding. However, state governments often assert operational control through the political process, potentially influencing how key resources are used. Do these different sources of publicness have competing effects on efficiency? Using a 5-year panel of financial and organisational data of HBCUs, this study explores the relative effect of each of these revenue sources on efficiency. The study finds that the efficiency of HBCUs is negatively impacted by higher proportions of state revenue, and that higher proportions of federal revenue have a positive effect on efficiency. This suggests that state governments should consider their political roles in assessing the performance of HBCUs, and that HBCUs might look to lessons from other organisations for methods to reduce the impact of state external control.

KEYWORDS:

• Data envelopment analysis
• efficiency
• HBCUs
• publicness
• resource dependence

Acknowledgments

The author would like to acknowledge the Department of Public Administration and the CHASS Research, Extension, Engagement and Economic Development Office at North Carolina State University. The author would also like to acknowledge the helpful comments of Branda Nowell, Greg Price, Rajade Berry-James, Richard Clerkin, and Catherine Eckel, as well as the helpful comments of anonymous reviewers.

Disclosure statement

No potential conflict of interest was reported by the author.