Abstract—This article examines the development of funding schemes at Finnish universities of applied sciences (UASs) between 2012 and 2018. During that period, the rudiments of the financing of Finnish UASs changed from cost-based to performance-based funding schemes. In a performance-based funding scheme, the state allocates funding based on the achievement of predefined objectives. The reform was intended to improve the processes and structures of UASs and to increase their effectiveness. This study explores the development of funding schemes from simple cost-based funding schemes towards more complex performance-based funding schemes with many indicators of performance. The results of the study offer empirical evidence on the impact of funding schemes on the measures of the performance of UASs, interpretations of the research object in context and causal connections between the above-mentioned elements.
 

Index Terms—funding scheme, performance-based funding, higher education, university of applied sciences