This article studies how a government should distribute funds among research institutions and how it should allocate them to basic and applied research. Institutions differ in reputation and efficiency and have an information advantage. The government should award funding for basic research to induce the most productive institutions to carry out more applied research than they would like. Institutions with better reputation a do more research than otherwise identical ones, and applied research is inefficiently concentrated in the most efficient high-reputation institutions. The article provides theoretical support for a dual-channel funding mechanism but not for full economic costing.

DE FRAJA, G. (2016). Optimal public funding for research: a theoretical analysis. RAND JOURNAL OF ECONOMICS, 47(3), 498-528 [10.1111/1756-2171.12135].

Optimal public funding for research: a theoretical analysis

DE FRAJA, GIOVANNI
2016-01-01

Abstract

This article studies how a government should distribute funds among research institutions and how it should allocate them to basic and applied research. Institutions differ in reputation and efficiency and have an information advantage. The government should award funding for basic research to induce the most productive institutions to carry out more applied research than they would like. Institutions with better reputation a do more research than otherwise identical ones, and applied research is inefficiently concentrated in the most efficient high-reputation institutions. The article provides theoretical support for a dual-channel funding mechanism but not for full economic costing.
2016
Pubblicato
Rilevanza internazionale
Articolo
Esperti anonimi
Settore SECS-P/01 - ECONOMIA POLITICA
English
Con Impact Factor ISI
Funding of research
DE FRAJA, G. (2016). Optimal public funding for research: a theoretical analysis. RAND JOURNAL OF ECONOMICS, 47(3), 498-528 [10.1111/1756-2171.12135].
DE FRAJA, G
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/2108/175533
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