Report reveals performance-based funding of universities is not a magic formula

The report “Performance-based Funding of Universities in Europe” gives an overview of performance elements in public funding for universities in 28 systems across Europe and focuses in particular on funding formulae with output indicators (such as numbers of graduates) and performance contracts. It combines system level data with case studies in a unique way and assesses the opportunities, risks and limits of performance-based funding. The analysis reveals that expectations towards performance-based funding are often too high. It further concludes that this funding mechanism should be used with caution and considered in the wider context. The report also outlines strategies for managing performance-based funding in order to reap its full benefits and mitigate the risks. More...