This article examines performance-based funding (PBF) as a governance tool in higher education through a meta-narrative review of recent literature. Rather than offering yet another extensive critique of neoliberalism and new public management (NPM) as drivers of PBF, it calls for a closer look at the conditions under which PBF succeeds or fails, and why. Drawing on the insights from diverse strands of research, the article proposes a renewed research agenda that addresses conceptual, methodological, and empirical approaches to generate more robust evidence. Such an evidence base could then inform more effective governance solutions that benefit individual academics, higher education institutions, and governments alike.