This post is a follow-up to points I made about the absurd inefficiency of the grant system that funds most public research. While there is some value in just shedding light on a problem, it is far more valuable to point out the problem and propose some solutions.  Most of my proposed fixes stem from a conversation I had with Duke Economist Mike Munger, so he deserves the lion’s share of the credit.

These ideas apply primarily to government money aimed at research with very limited or nonexistent near-term applications. The government shouldn’t be funding research that has obvious near term benefits.  I argue that these projects should be left to the private sector for a number of reasons including efficiency disparity and the simple fact that there is only so much the government should spend on research, so it shouldn’t fund things that would be funded through other means.

However, plenty of research without obvious near term value will benefit humanity down the line in completely unexpected ways. Take pure mathematics for example – it doesn’t seem to benefit anybody, but given a few dozen to hundreds of years, theories that mathematicians are coming up with now will percolate into physics, chemistry and biology, generating new discoveries there that will be taken by engineers and used to benefit millions of people.

Here is a rough sketch of some solutions:

a)    Decrease focus on deliverables

Research is inherently a process of discovery. Think of the classic (though apocryphal) story of that paragon of scientists, Issac Newton. He clearly didn’t sit down under the apple tree thinking “I need to discover a new natural law today.” And in fact, if he was funded by a grant to turn lead into gold (people forget about it, but Newton was also a practitioner of alchemy) he wouldn’t have sat down under the tree in the first place - he would have been in his lab, too busy frantically trying to tune proportions of sulfur and mercury so that he could demonstrate progress and get his grant renewed.  Grants constrain the focus of recipients, suppressing serendipitous innovation.  Thus, a revamped system should give money based on quality of past performance, rather than the promise of future deliverables.

b)   Increase the duration of funding

Significant, fundamental research of the type the government should be funding can’t be rushed. Grants with short time limits encourage a number of counterproductive behaviors: rushed and shoddy work or a project that might have gone somewhere given more time, but is terminated due to lack of funds because it couldn’t be completed in the set time limit.  Uncertainty about year-to-year funding also incentivizes researchers to take on projects with low probabilities of failure, limiting the advances of research.  To minimize these problems, the funding system should increase the duration of awards to provide researchers with the flexibility to truly explore.

c)    Base awards on real-life metrics, rather than proposals

It turns out that researchers don’t keep all their ideas and work in vaults and can only be convinced to bring them forth when tempted by grants. Instead, we love to show off our work and talk about our ideas whenever possible.  The most pedigreed method is of course the peer-reviewed paper. However, thanks to the Internet, researchers can now share completed work and future plans with the world through an ever-expanding list including articles, blogs, educational videos and recorded talks.

Basing funding on communication with actual value rather than grant proposals has a number of upsides:

  • Those controlling the funding could spend the time they would have wasted reading grants paying attention to the work and ideas being presented in their field, which is something they would have done regardless.
  • Researchers are incentivized to share their work with the world in as clear and compelling a way as possible. They will have time to share and perform actual research because grant proposals won’t continuously eat their time.
  • This increased information flow alone will benefit everybody because more and better information about up-to-date research will not only make more people informed, but will spur on innovation at a greater rate.

If we could implement just those three changes to the government funding system, I believe the benefits would be outstanding. However, this list is far from complete. I don’t wish to cause any eye-glazing, as too-long posts are wont to do, so a future post will take up where this one leaves off – finishing the list and synthesizing the changes into an architecture for an improved (but still imperfect) funding system.