Research Quality, Efficiency and Project funding in the Swedish Higher Education sector

This report studies the effect in Sweden of the funding of research in the HE sector. In particular, it will analyze how so-called project funding will influence the performance and quality of research. In Sweden project funding makes up 56 percent of the total funding for research. The analysis shows that the performance in terms of citations measured at a university level almost entirely depends on the total amount of research funding available. For the period studied, 98 percent of the differences between HE institutions are explained by the total amount of funding alone. This means that only two percent cannot be attributed to the amount of funding. The differences in performance between institutions corresponding to the two percent are then studied and it is shown that the relative amount of project funding has no positive effect on the performance. In fact, the data indicates a negative effect of project funding on performance. This implies that project funding will not promote quality. Finally, the effect of decreasing the project finding on performance is analyzed. A decrease in the amount of funding that is project based will lead to a quite substantial increase in performance, since it will give researchers more time to do research as opposed to applying for project funding. Our estimates show that in Sweden between ten and twenty percent loss of performance is due to time spent on applications. Consequently, by reducing the amount of project funding one can gain the same amount in performance. In money, this will represent a quality gain corresponding to four to eight billion SEK annually, a substantial amount compared to the roughly forty billion SEK that the HE institutions receive in total for research. We believe that the findings are of importance not only in Sweden, but in general for countries with project funding.This report is based upon, and to a large extent coincides with a report in Swedish – "Forskningskvalitet, effektivitet och extern finansiering" published by the same author. The present report is, however, to some extent adapted to an international readership.