Fifteen Years of a PBRFS in New Zealand: Incentives and Outcomes

This paper examines the transformation of New Zealand universities following the introduction in 2003 of the Performance-Based Research Fund System (PBRFS), which assesses performance quality using a peer-review process, and allocates funds based on individual researcher performance. The analysis, based on a social accounting framework, utilises longitudinal researcher data available from the three full assessment rounds, in 2003, 2012 and 2018. The longitudinal data enable identification of entry, exit and quality transformation of researchers and their contribution to changes in university and discipline research quality. The dynamics are found to be closely related to the new incentives created by the assessment system According to the quality metric used by the PBRFS, the research quality of NZ universities increased substantially over the period, although the rate of increase was much slower during the second period, 2012 to 2018, and considerable heterogeneity across universities and disciplines was revealed. Much of the improvement can be attributed to the high exit rate of lower-quality researchers. New entrants consistently reduced the average quality of all groups, reflecting the difficulty of recruiting high-quality researchers. Changes in the discipline composition of universities made a negligible contribution compared to improvements in the quality of the stock of researchers.