Implementation of the performance-based funding policy in Ukrainian higher education: impact on institutional behaviour?

Introduced into the Ukrainian higher education sector in 2019, the performance-based funding policy has experienced volatile implementation. Reinstated in 2024, it coincided with the public grants reform and consolidation of the higher education network. This article presents an implementation analysis conducted to understand the organisational responses of Ukrainian higher education institutions towards the performance-based funding policy and to uncover the possible changes it has prompted in their behaviour. The analysis relies on primary data collected from 28 respondents representing leadership and operational and research managers at 22 higher education institutions, including those that have benefitted from the performance-based funding policy implementation and those that have not. The concurrent mixed-method research design is anchored in parametric factorial analysis of the respondents’ perceptions and thematic analysis of their confidential semi-structured interviews. Drawing on Oliver’s strategic response framework, the article elicits diverging strategic responses of higher education institutions adopted in reaction to the performance-based funding policy and outlines the institutional changes triggered by it, including with regard to internal incentive systems. The article brings forward policy recommendations for better implementation of the performance-based funding policy, including during the full-scale Russian war on Ukraine.