This study analyzes and discusses how competition-based funding has been institutionalized in the three North East Asian countries of Japan, Korea, and Taiwan since the neoliberal reforms in the 1990s. We found that states set aside additional, 'competition-based' funding for distribution among higher education institutions. In addition, private universities have emerged as winners at the zero-sum game because their management styles are much more aligned with the managerial style. However, private universities are bound by state policy, and regulatory frameworks are deeply institutionalized within them with the growing public funding. We also observe that institutional practices of public universities are moving to market-oriented systems because of the growing competition. However, the increased responsiveness of HEIs to state policy does not necessarily result in an increase in their societal contributions because a university as a professional organization has the potential for generating a better societal contribution through collaborations as well as competition.