This article explores the link between modes of funding, governance and performance in higher education with the help of a case study involving three engineering colleges in West Bengal, India. It examines the major factors driving performances in the selected higher education institutions. It explains how the ability to adopt and implement performative policies depends on the objective functions, mode of funding and the reputation of the institutions. The findings suggest that the obsession with performance and its linkage with funding may not necessarily lead to a sustained and inclusive improvement in quality in the higher education sector. On the other hand, institutions driven by an objective of maximising prestige may ensure quality without any performative governance policies in place. The findings are contextualised in the larger debate about implementing neo-liberal policies for the improvement of quality in the higher education sector at the national and global level.