Research funding and economic stimulus

As a result of, and in addition to, the credit crunch, it looks as if we’re in grave danger of a bad recession. That suggests the need for macroeconomic stimulus, and accordingly the Democrats in Congress are working on a package.

One problem with the “stimulus” strategy is that it takes time to move money through the pipeline; instead of usefully absorbing otherwise unemployed capacity, the stimulus can arrive just as the economy moves toward full employment, thus worsening the risk of inflation.

If the problem is to spend lots of money quickly wihtout wasting it, I have a suggestion: double the budget of every peer-reviewed research-funding agency and tell them to use it on the projects that just missed the cut this year and last.

Those projects are already designed &#8212 many of them are continuations, and in that case they’re already up and running &#8212 and the money would start flowing almost immediately. Since National Institutes of Health has been funding only about the top 6% of its proposals, there’s lots of high-quality stuff already evaluated but not funded. The NIH is the whale of federal research-grant agencies, at about $30 billion a year. The National Science Foundation comes in a distant second at about $7 billion; I’m not sure how much the others (NOAA and EPA, for example) amount to, but this could be a noticeable chunk of a stimulus package.

The other obvious approach is revenue sharing with the states, on a capitation basis.

Author: Mark Kleiman

Professor of Public Policy at the NYU Marron Institute for Urban Management and editor of the Journal of Drug Policy Analysis. Teaches about the methods of policy analysis about drug abuse control and crime control policy, working out the implications of two principles: that swift and certain sanctions don't have to be severe to be effective, and that well-designed threats usually don't have to be carried out. Books: Drugs and Drug Policy: What Everyone Needs to Know (with Jonathan Caulkins and Angela Hawken) When Brute Force Fails: How to Have Less Crime and Less Punishment (Princeton, 2009; named one of the "books of the year" by The Economist Against Excess: Drug Policy for Results (Basic, 1993) Marijuana: Costs of Abuse, Costs of Control (Greenwood, 1989) UCLA Homepage Curriculum Vitae Contact: