The sources of university funding can be categorised in various ways. Herethe effects of funding, on university autonomy, are examined. Reasons forgovernments to finance higher education are identified. They include thedesire of governments for influencing higher education activities, and for pursuing efficiency and social equality (Williams 1992, p. 136).
With theemergence of the knowledge-based economy, the potential of universities to help strengthen the competitiveness of a nation, is recognised (Kerr 1995;Duderstadt 2000)