State financing impact on autonomy of higher education institutions and its link with economic activities of universities

ENThe autonomy of the HEIs and its limits is an object of constant discussions and inquiries. The question that is also researched and accentuated is the relationship between the autonomy of HEIs and the accountability to the society according to certain criteria. The financing aspect of higher education is also one of the most problematic aspects in the system of higher education. None of the models applied for the financing of higher education and measures chosen in Lithuania was able to ensure the accessibility of studies, quality, nor could attract qualified pedagogical personnel. It is stated that insufficient financing of higher education has direct influence on other dimensions of higher education system. If the universities are not granted autonomy, they cannot be innovative and react effectively to social and economic changes, they are not able to correspond to social and economic needs of the state that cannot fulfil expectations of the students to achieve better quality of life. The aim of the paper is to analyse the impact of the financing method of higher education institutions chosen by the state on economic activities of the HEIs and their financial autonomy. In the first part of the paper the trends of the financing of the system of Lithuanian higher education are analysed. The second part of the paper analyses the impact of state financing on institutional autonomy of HEIs. The third part reveals the significance of financial autonomy of HEIs and its impact on the economics of higher education.