Abstract
Performance-based research funding systems (PBFS) allocate direct institutional funding to universities and other public research organizations based on an assessment of their research. There are three main types: evaluation-based funding, indicator-based funding, and funding contingent on performance agreements. Potential problems with PBFS depend on the type and design of the system, its influence on funding and reputation, and the involvement of the funded organizations in collaboration about the design and implementation. PBFS may create an overview over and external insight into the research activities and provide fairer and more transparent funding allocation criteria. However, they also come with a paradox: The validity of the methods, and thereby the usefulness of PBFS, may be reduced when performance assessment or measurement is connected to funding. Minimizing their effects on funding and reputation may support the achievement of their aims.
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