Performance-based university research funding systems

The university research environment has been undergoing profound change in recent decades and performance-based research funding systems (PRFSs) are one of the many novelties introduced. This paper seeks to find general lessons in the accumulated experience with PRFSs that can serve to enrich our understanding of how research policy and innovation systems are evolving. The paper also links the PRFS experience with the public management literature, particularly new public management, and understanding of public sector performance evaluation systems. PRFSs were found to be complex, dynamic systems, balancing peer review and metrics, accommodating differences between fields, and involving lengthy consultation with the academic community and transparency in data and results. Although the importance of PRFSs seems based on their distribution of universities’ research funding, this is something of an illusion, and the literature agrees that it is the competition for prestige created by a PRSF that creates powerful incentives within university systems. The literature suggests that under the right circumstances a PRFS will enhance control by professional elites. PRFSs since they aim for excellence, may compromise other important values such as equity or diversity. They will not serve the goal of enhancing the economic relevance of research.

► Performance-based research funding systems (PRFS) are national systems of research output evaluation used to distribute research funding to universities. ► PRFSs have emerged in response to the knowledge economy, new public management and a desire for research excellence. ► PRFSs create powerful incentives within university systems less by redistributing funding than by creating a public competition for prestige. ► Effects on institutional autonomy are ambiguous, but under the right circumstances a PRFS will enhance control by professional elites. ► PRFSs will not increase equity or diversity, nor enhance economic relevance.