University Funding through the Lens of the Resource Dependency, Agency and Transaction Cost Theories: A South African Perspective

Abstract

In this paper, I assimilate three theories, namely the resource dependency theory (RDT), agency theory and transaction cost theory (TCT), to reflect on the South African university funding framework. I relied on a combination of secondary and primary data. Secondary data included audited annual reports of the 26 public universities in South Africa, government publications from the Department of Higher Education and Training (DHET) and statistics from the National Students Financial Aid Scheme (NSFAS). The primary data were in the form of interviews involving 17 respondents representing Student Representative Council (SRC) members, final-year NSFAS-funded students, officials from participating universities’ Finance and Registrar’s offices, DHET officials and recently employed former NSFAS-funded students. The findings reflect that university funding in South Africa follows the RDT-Agency-TCT theoretical paradigm. In line with this paradigm, public universities in South Africa should diversify their funding sources to maintain their autonomy while remaining financial sustainable.