He Who Pays the Piper:
Federal Funding Of Research
by Don Doig
Don Doig is an associate policy analyst of the Cato Institute with a background in microbiology research.
Executive Summary
A groundswell of discontent has arisen in the U.S. scientific community, fueled by uncertainty of federal funding, censorship, red tape, and assorted other ills. In 1979 one observer noted, in an editorial in Science magazine:
During the past 2 months I have had casual conversations with about 20 professors from widely scattered universities. If their attitudes are an indication of the spirit on campus, the long-term future of science in America is in jeopardy. Not one of those 20 conveyed the impression that life is great, science is fun, and that academic research is the best possible of all activities. Rather the majority were gloomy -- some were bitter. How could such individuals inspire the young and foster in them a love of knowledge and a zeal for lifelong scholarship? [1]
Not too long ago, a sense of euphoria and opportunity pervaded the research world; funding was increasing rapidly, scientists encountered minimal red tape, and research departments were expanding. What has happened? Recent years have seen expanding involvement of the federal government in the funding of basic research, and with this involvement has come bureaucratization and politicization. Scientists and administrators within the research community have increasingly expressed alarm at this development. Researchers yearn for the halcyon days when ample resources were forthcoming from the government and regulation was relatively light.
Following World War II, the federal government began to provide significant support for university research. Federal involvement increased dramatically when the Soviets gained the lead in the space race with the launch of Sputnik. Policy-makers wanted to enhance the size of America's research efforts to provide a better basis for technological and military expansion to counter what they perceived as the Soviet threat.
The university and research communities in the U.S. probably should have viewed this largess with some skepticism, incorporating as it did the centralization and militarization of science. It is difficult to reconcile the ideal of an unfettered pursuit of knowledge with the demands of a defense establishment intent on utilizing science and technology in pursuit of military superiority, or with the demands of a democratic society for accountability for the use of federal funds. Former President Eisenhower, in his famous warning against the dangers of the military-industrial complex, went on to describe the pernicious effects of federal funding of science: "The prospect of domination of the nation's scholars by federal government project allocation, and the power of money, is ever present, and is gravely to be regarded."[2]
The university and research communities in the U.S. probably should have viewed this largess with some skepticism, incorporating as it did the centralization and militarization of science. It is difficult to reconcile the ideal of an unfettered pursuit of knowledge with the demands of a defense establishment intent on utilizing science and technology in pursuit of military superiority, or with the demands of a democratic society for accountability for the use of federal funds. Former President Eisenhower, in his famous warning against the dangers of the military-industrial complex, went on to describe the pernicious effects of federal funding of science: "The prospect of domination of the nation's scholars by federal government project allocation, and the power of money, is ever present, and is gravely to be regarded."[2]
Funding: Federal vs. Private
Nevertheless, university administrators initially viewed federal funds as resources which could better support research and graduate education activities which they would have had to support anyway.[3] Relatively few strings were attached to these funds, and the money was used for the direct costs of the research and for graduate education. In recent years, however, federal research grants have evolved particular patterns of control which differ significantly from other forms of disbursement rules, such as those attached to foundation grants.
Institutional grants tend to be programmatic, while federal grants and contracts are awarded on a project basis for individual scientists. Private grants from industry or foundations also allow flexibility in research objectives because they typically allow a more generalized approach with minimal red tape, compared to federal projects. As an example, the University of Illinois chemistry department receives annual grants from E.I. duPont de Nemours & Co. The department head controls the disposition of the grants, and DuPont requires only that projects be relevant to the general purpose of the grant. Neither applications nor financial reports are required. The director of the School of Chemical Sciences describes the procedure:
At the end of the year, a brief report is submitted "giving a general description of how the funds were used" and commenting perhaps on future needs The red tape is minimal because DuPont has a continuing basis for evaluating the department's performance -- the abilities, qualifications, and numbers of our graduates they employ.[4]
Grants made by the Sloan and Dreyfus foundations differ in detail but involve little red tape and permit broad discretion in expenditures.[5]
The John D. and Catherine T. MacArthur Foundation awards no-strings-attached fellowships of $50,000 a year for periods of from 5 years to 20 years. The grants require no applications, project outlines, or reports. J. Roderick MacArthur explained:
The idea behind the MacArthur Prize is that Einstein could not have written a grant application saying he was going to discover the theory of relativity. You can't write a proposal saying you're going to discover something you don't know exists. Einstein needed to be free, and so do future Einsteins.[6]
Federal research grants, on the other hand, are awash in red tape and bureaucratic oversight. Lengthy, detailed applications are required, which are subject to peer review. In 1960, the prominent intellectual Leo Szilard suggested, at a time when federal support of research was growing, that scientific progress could be effectively halted by instituting a competitive grants system such as now exists. In 1978 a total of about 47,500 proposals were submitted to the various federal agencies.[7] Researchers under such a system must describe their projects and goals. One estimate is that at least three weeks is spent writing each proposal (it can take as long as three months, or even three man-years for group proposals). The review process adds another three mandays per proposal, for a total of 575 man-years spent on review. This is time spent by leaders in the field, time presumably taken away from productive research. The total time investment (writing and review) is approximately 3,300 manyears of research time. But since This crap is always published by money hog, grant thieving pseudo science whores. Well known prostitutes ;) The second oldest profession. In ancient days they were called Priests.
As Bill Murray so eloquently rebutted in Ghostbusters: "Back off, I'm a scientist".
Cato Policy Analysis No. 22 March 17, 1983 most university researchers spend about half their time teaching, this figure may represent the entire equivalent research time of 6,600 academic scientists. On top of this, grant applications are rejected from 60 to 90 percent of the time (depending on the program), with a more typical range of between 70 and 85 percent. If a grant is approved, progress reports can require an equal amount of time. One study estimates that proposal and progress report writing reduce research output by one paper per year per faculty member, or a 10 to 20 percent loss in research output.[8]
Another problem with current federal grants is that new, innovative areas of research "fall between the cracks of federal funding, which follows traditional lines."[9] Scientists must be free to follow leads as they develop, to change direction as new opportunities present themselves. Unfortunately, the "strict compartmentalization of the [federal] funding organizations [makes] it very difficult for a scientist to follow the direction that research takes."[10] Federal grants attempt to "target" basic research to purchase specific research results. The auditing and regulatory functions of the federal bureaucracy are increasingly being applied to the delicate and sensitive process of basic research, further limiting creative flexibility and stifling innovation. One physicist comments:
Ostensibly these [functions] are to prevent fraud, but most research institutions already have safeguards to protect against this very rare abuse. In reality, the bureaucratic drive for uniformity seems a more likely explanation for the narrow auditing perspective imposed on the scientific researcher.[11]
Given the need for freedom in lateral movement, to follow new opportunities as they develop, which makes possible the development of many "breakthrough" ideas, funding institutions have to be flexible. As a safeguard, "the basic researcher...operates in a highly competitive environment with many colleagues standing on the sidelines, eager to substitute for him if he falters. If he succeeds, continued funding and intellectual satisfaction are his reward. If he fails, he'd better look for another career."[12] As it is, competent, creative researchers are often forced to "bootleg" their research.[13] The case of Leo Szilard is a good example.
When Szilard applied for grants he always proposed to do experiments that he had in fact already done, so that he could use the money for research whose outcome he could not predict. The system worked perfectly until one year his application was rejected on the grounds that the proposed experiment was impossible.[14]
The peer review system has been criticized as an old-boy network prone to nepotism and favoritism.[15] Others have defended it, claiming that available evidence indicates that grants are distributed equitably.[16] And still others argue that there is a large element of chance in successful grant applications, indicating substantial disagreement among reviewers.[17]
Clearly, there is potential for abuse; more importantly, the peer review system may inhibit innovation. Thomas Kuhn has discussed the mechanism of scientific "breakthrough" discoveries as shifts in the fundamental framework of analysis, or "paradigm" shifts.[18] Paradigm shifts typically encounter resistance from representatives of the "establishment" viewpoint, not usually out of dishonesty, but because they have difficulty in accommodating a new view. Researchers sitting on peer review panels will, understandably, view grant proposals from within a particular paradigm. And it would not seem unreasonable to suppose that grant proposals falling outside that framework will have difficulty getting funded.
The compartmentalization of funding agencies, the political accountability of agency bureaucrats, and the resultant tendency to fund "safe" research also inhibit speculative funding. It becomes clear, then, that federal agencies will tend to implement policy destructive of innovation. One member of a funding agency is reported to have said: "We admire innovation, but we don't trust it. And we fund what we trust."[19]
Funding Fluctuations
Basic research, moreover, is sensitive to uncertainties in government funding, since long-term planning is a necessary component of many experiments, and long-term career choices and morale are affected by fluctuations. As government priorities change, large fluctuations in research and graduate education funding can routinely be expected. Depending on administration biases or public pressure, certain research fields will periodically experience boom-and-bust funding. In recent years scientists have migrated to cancer and energy research.[20] In 1970, the National Cancer Institute (NCI) became the focus of a massive campaign to conquer cancer in time for the Bicentennial, to be managed by highly political committees answering to the President. As it turned out, the cancer crusade only furthered NCI's monopoly on cancer research, besides spending $9 billion. NCI now controls between 75 and 90 percent of all cancer research money.[21] The Reagan administration has favored large increases in defense research and development (R&D) spending, fairly constant funding of basic research, and major cuts in social, behavioral, and economic science funding (at least in 1981 and 1982; 1983 will see partial restoration of some funds).[22]
Universities have trouble responding to such rapid changes and attempt to resist cuts. During the period of post-Sputnik expansion, more Ph.D.s were trained than the research and university systems can now absorb, given stabilized research budgets. One analyst calculated that the growth in graduate training and research funding during the 1960s resulted in the overbuilding of university capacity, laboratories, and faculty by at least 25 percent.[23] In response to federal funding, universities have now overextended themselves. One result has been an incentive to increase overhead charges on federal research grants -- pushing indirect cost charges to the limit, draining resources intended for research, and increasing federal demands for grant accountability. This has led, in turn, to a federally-mandated bureaucracy in university business offices.
Science and Bureaucratization
In 1979 the federal government imposed further bureaucratic controls on the research community. A new Office of Management and Budget circular [24] called for a complete report on all salaried activities of scientists who spend any time at all on federally-funded work.[25] Scientists have not responded favorably. The National Academy of Sciences passed a resolution in 1980 which reads in part:
Application of these new regulations to institutions of higher learning would further constrain the already limited flexibility in research thrust, increase the administrative burden, reduce morale among teaching and research personnel, and provide a cumbersome, meaningless documentation in terms of percent-of-effort for a continuum of scholarly activities. Moreover, because these regulations would monitor non-federally supported academic functions as well, inappropriate controls might be exercised.[26]
This rule is clearly invasive of academic freedom; it attempts to monitor university teaching and independent research, even though they are not federally funded. The com- plex relationships between research and teaching render the regulations meaningless in terms of accountability. Diversion of resources to bureaucratic accounting under the rule is likely to waste more than would be saved and depress morale still further. MacLane sums up the problem:
[This rule] is meaningless, invasive, inappropriate, counterproductive, and ineffective... such total reis not in keeping with the character of the university; the university does not consist of a set of faculty employees whose time is bought by the administration, but is rather a group of scientists and scholars engaged in free and independent inquiry.[27]
It seems obvious, then, that controlled bureaucratic management is incompatible with excellence in scientific re search. Since bureaucracies are compelled by an internal agency logic to expand their active regulatory roles, an inevitable conflict is generated. Bureaucrats, however, cannot be assumed to be acting out of bad intentions. For instance, Elmer Staats, the former U.S. Comptroller General, recognizes the nature of basic research:
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