Competition for Funding or Funding for Competition? Analysing the Dissemination of Performance-based Funding in European Higher Education and its Institutional Effects

Mass higher education has promoted the development of larger, costlier, and more heterogeneous systems. Like many public services, HE faced tight competition for funding, alongside pressures to become more efficient in their use of public funds. One major development in public funding has been the introduction of performance-based funding. In this paper, we analyse the dissemination of PBF in European HE and discuss its main institutional effects. We will start by discussing the rationales for the introduction of these financial incentives regarding the behaviour of HEIs and their organizational response to externally led stimuli. We then present the dissemination of PBF across European higher education and reflect about the main institutional effects of the dissemination of PBF. We present some concluding remarks about the management challenges created by the emphasis on competitive rationales in public HE.