Building on international comparative research – in particular, a soon to be published cross-national study for the European Commission on trends and effects of higher education funding policies (Jongbloed et al, 2022) – this presentation will provide an overview of the key issues and dilemmas around Performance-Based Funding (PBF) in higher education. PBF comes in different shapes and sizes and has become increasingly popular among governments and funding agencies across the world. Elements of PBF appear in the basic funding of universities – in funding formulas and in negotiations-based funding agreements with individual universities, but they also appear in various types of targeted and competitive project funding. Despite is popularity among policymakers, PBF is also a highly contentious approach for the steering and guidance of universities. Based on information collected from all 27 EU Member States, supplemented with data from the ETER database, and experiences from non-EU countries, we will discuss some of the different designs of PBF and shed some light on their advantages and disadvantages, touching on the question of: ‘Does PBF matter for the performance of higher education institutions?’ Some policy implications will also be presented. Gunnar Sivertsen, NIFU, Oslo, has been involved as discussant.

The presentation is based on the paper: Jongbloed, B., de Boer, H., McGrath, C., de Gayardon, A., et al. (2022 - to be published). Study on the state and effectiveness of national funding systems of higher education to support the European Universities Initiative. Brussels: DG-EAC.