Abstract
The state authorities in Germany used to fund public sector research without controlling the performance of the research units. This has changed during past decade, where the dominant mechanism by which formerly unconditional state funds are allocated nowadays is indicator-based performance measurement. The indicator sets used to measure the research-related performance in the German public science sector are usually very narrow, often consisting exclusively of finished doctoral theses and third-party funds. Using a unique dataset of 473 German research units from astrophysics, nanotechnology, economics and biotechnology, this paper outlines principles for the construction of sensible indicator sets for the performance measurement of scientific research groups. It is argued that scientific production is multidimensional. Thus one-sided indicator sets that fail to cover the relevant output dimensions give rise to incentives that will ultimately lower the performance of the science sector in total. Indicator sets should strive for sustainable incentives, which can be guaranteed if the sets are broad enough. As a starting point it is shown that the very common performance indicator ‘acquired third-party funds’ may affect research efficiency negatively, especially if the level of third-party funds is already very high. Therefore, we conclude that third-party funds should be used with great care, if at all.
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