"Anyone who labors at academic scholarship knows how dependant that enterprise is on a procedure known as “peer review”. A scholar submits a work to a journal or press or sends a proposal to a foundation; the submission is then evaluated by other professionals who are experts in the area covered by the work. The judgments of these referees determine whether the work is published by the target journal or press, or is funded by the desired institution. If rejected by peers at one venue, the work will have to be floated elsewhere.
The peer-review system is often described as a system of certification, and indeed it is, in two senses: acceptance to a journal or publishing house via peer review certifies a body of work, and it also certifies the scholar who produced it. As commonly conceived, to say of a published article or book that it was peer-reviewed is to say that it is perceived by experts as a contribution to human knowledge. Peer review is a mechanism, then, for quality control; it protects us from contamination by error and poor argument, and affords us truth or contributions to attaining truth.
To a certain extent scientific researchers live or die by the peer review system, for their ability to carry out research and conduct experiments depends on the availability of grants, to an extent that is not matched in the humanities. This point might at first glance explain only why peer review of grant applications would elicit discussion amongst scientists and social scientists. But the prospect of securing a grant in turn depend on an applicant’s track record of publications and previous grants, so peer review of publications is critical; and vice versa, without grants, scientists often cannot publish because they cannot do research."
-Excerpts from the book ‘Peer Review – A Critical Inquiry’ by David Shatz (reproduced with permissions)