Financing mechanisms of higher education, Case study universities in Germany

Financing and allocation mechanisms are important instruments in the governance of higher education. At present, in Iran, budget of public universities determined and distributed according to “per capita cost” model, which is input-based and not performance-oriented. In this research, in order to use successful experiences of developed higher education systems, using the descriptive method, university financing mechanisms applied by German government studied and extracted implications for higher education in Iran. The findings suggest that Germany, in spite of having a dominant public higher education, is successful in terms of investment efficiency, advancement of science and technology, and lowering the unemployment rate of graduates. Also, diverse financing mechanisms, establishing intermediate associations, stimulating university missions, targeting public aids, and performance-oriented- instead of input-oriented mechanisms, are the main elements of the German higher education finance system.