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

Oliver Jan Mbhalati

Accounting and Finance Research, 2026, vol. 15, issue 2, 21

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.In this paper, I assimilate[CRS1] [OM2] [OM3] 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[CRS4] [OM5] 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[CRS6] respondents representing Student Representative Council (SRC) members, final-year NSFAS-[CRS7] funded students, officials from participating universities’ Finance and Registrar’s offices, DHET officials and recently employed former NSFAS-funded students. The findings reflect[OM8] 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 t[CRS9] o maintain their autonomy while remaining financial sustainable. [CRS1]In APA, use active not passive voice and the first person for proper attribution. I used “I†throughout because you used “this researcher†(meaning you) on p. 6. [OM2]Accepted [OM3]Accepted [CRS4]Revised for anthropomorphism, the attribution of human traits or intentions to a nonhuman entity. The study cannot rely. [OM5]Accepted [CRS6]In APA, use numerals for numbers 10 and above. “A total of†is redundant if you provide the number. [CRS7]Hyphenated—it’s a compound adjective modifying “students." [OM8]Cancelled the s for the sentence to read… The findings reflect…. [CRS9]“In order†adds little meaning. You can safely delete it.

Date: 2026
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