Higher Education Policy

, Volume 20, Issue 4, pp 413–440 | Cite as

Funding Diversity: Performance-based Funding Regimes as Drivers of Differentiation in Higher Education Systems

  • Sverker Sörlin


In most countries higher education institutions used to receive large portions of their funding by direct state allocation. For the past couple of decades this trust-based funding regime has been replaced by performance-based regimes. The article rests on the empirical observation that new funding regimes are increasingly becoming a policy instrument that is used to deal with resource allocation in growing higher education systems. It is argued that performance-based funding is used to promote vertical differentiation and functional specialization between institutions while at the same time secure horizontal diversity and pluralism within the system. The sweeping change is orchestrated by governments that are pressed by globalization to provide high-ranking, attractive institutions for hubs of innovation and competitiveness in knowledge-based economies. Advocates can be found among business and competitive universities, whereas reforms cause concern among other academics who perceive a loss of academic freedom and professional status.


higher education policy research policy higher education funding regimes accountability 



I would like to acknowledge support from the UNESCO Forum Europe–North America committee, of which I have been a member since 2003, and from The Swedish Research Council, which has funded my work on research funding during 2006 and 2007.


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Copyright information

© International Association of Universities 2007

Authors and Affiliations

  • Sverker Sörlin
    • 1
  1. 1.Division of History of Science and TechnologyRoyal Institute of TechnologyStockholmSweden

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