The Economics of Science - Funding for Research

International Centre for Economic Research Working Paper No. 12/2010

37 Pages Posted: 5 Jul 2010

See all articles by Paula E. Stephan

Paula E. Stephan

Georgia State University - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: June 2010

Abstract

Scientific research has properties of a public good; there are few monetary incentives for individuals to undertake basic research and the conventional wisdom is that the market, if left to its own devices, would under- invest in research in terms of social benefits relative to social costs. Thus research, especially of a basic nature, has traditionally been supported by either the government or philanthropic institutions. More recently, industry has also begun to support research conducted in nonprofit institutions. This paper explores the various sources of support for research in the university sector. Although the focus is on the United States, the paper discusses trends in other countries as well. The paper also examines mechanisms for distributing funds, including peer review and performance based distribution. The paper closes with a case study of the National Institutes of Health doubling during the period 1998-2002.

Suggested Citation

Stephan, Paula E., The Economics of Science - Funding for Research (June 2010). International Centre for Economic Research Working Paper No. 12/2010. Available at SSRN: https://ssrn.com/abstract=1634772 or http://dx.doi.org/10.2139/ssrn.1634772

Paula E. Stephan (Contact Author)

Georgia State University - Department of Economics ( email )

P.O. Box 3992
Atlanta, GA 30302-3992
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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