Can Private Money Buy Public Science? Disease Group Lobbying and Federal Funding for Biomedical Research

Forthcoming in Management Science

47 Pages Posted: 23 Nov 2011 Last revised: 8 Jan 2015

Deepak Hegde

New York University (NYU) - Leonard N. Stern School of Business

Bhaven N. Sampat

Columbia University - Mailman School of Public Health

Date Written: July 16, 2014

Abstract

Lobbying is an important non-market strategy pursued by private interest groups to influence public policy. However, little is known about how lobbying influences policy decisions made by federal agencies. We study this through examining lobbying by advocacy groups associated with rare diseases for funding by the National Institutes of Health (NIH), the world’s largest funder of biomedical research. Disease group lobbying for NIH funding has been controversial, with critics alleging that it distorts public science funding towards diseases with powerful groups. Our data reveal that lobbying is associated with higher political support, in the form of Congressional “soft earmarks” for the diseases. Lobbying increases with disease burden and is more likely to be associated with changes in NIH funding for diseases with higher scientific opportunity, suggesting it may have a useful informational role. Only special grant mechanisms that steer funding towards particular diseases, which comprise less than a third of NIH’s grants, are related to earmarks. Thus, our results suggest that lobbying by private groups influences federal funding for biomedical research. However, the channels of political influence are subtle, affect a small portion of funding, and may not necessarily have a distortive effect on public science.

Keywords: Lobbying, Special Interest Groups, National Institutes of Health, R&D

JEL Classification: O30, D72, P16

Suggested Citation

Hegde, Deepak and Sampat, Bhaven N., Can Private Money Buy Public Science? Disease Group Lobbying and Federal Funding for Biomedical Research (July 16, 2014). Forthcoming in Management Science. Available at SSRN: https://ssrn.com/abstract=1962937 or http://dx.doi.org/10.2139/ssrn.1962937

Deepak Hegde (Contact Author)

New York University (NYU) - Leonard N. Stern School of Business ( email )

44 West 4th Street
New York, NY NY 10012
United States

Bhaven N. Sampat

Columbia University - Mailman School of Public Health ( email )

600 West 168th St. 6th Floor
New York, NY 10032
United States

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