External evaluation and the funding of universities : a comparison of the UK and Finland

of market-style incentives into public services. Both countries have experienced rapid growth in the level of participation in higher education at a time of unprecedented pressure on public spending. Amongst the most prominent policy innovations have been the use of evaluation mechanisms and performance-related funding. In this article we examine the overall funding systems in these two countries and the role of external evaluation in allocating resources, as well as external evaluations which do not have funding implications. Drawing on evidence from the EVALUE study, we describe how these evaluation mechanisms are perceived by the academic staff in the two countries. We examine some behavioural responses to the evaluation systems and their relationship with funding and, in doing so, draw attention to the importance of different national contexts and the particular mix of incentives generated by the funding mechanisms.