Economics Shapes Science by Paula Stephan.
At a time when science is seen as an engine of economic growth, Paula Stephan brings a keen understanding of the ongoing cost-benefit calculations made by individuals and institutions as they compete for resources and reputation. She shows how universities offload risks by increasing the percentage of non–tenure-track faculty, requiring tenured faculty to pay salaries from outside grants, and staffing labs with foreign workers on temporary visas. With funding tight, investigators pursue safe projects rather than less fundable ones with uncertain but potentially path-breaking outcomes. Career prospects in science are increasingly dismal for the young because of ever-lengthening apprenticeships, scarcity of permanent academic positions, and the difficulty of getting funded.Working paper version of the book.
From the abstract: Scientific research has properties of a public good; there are few monetary incentives for individuals to undertake basic research and the conventional wisdom is that the market, if left to its own devices, would under-invest in research in terms of social benefits relative to social costs. (emphasis mine)...See also this Nature commentary
From the conclusions: ... In one sense, U.S. universities behave like high-end shopping malls. They are in the business of building state-of-the art facilities and a reputation that attracts good students and faculty. They then turn around and “rent” the facilities to faculty in the form of indirect costs on grants and the buy-out of salary. Faculty, in turn, create research programs, staffing them with graduate students and postdocs, who contribute to the research enterprise by their labor and the fresh ideas that they bring, but who can also be easily downsized, if and when times get tough. Universities leverage these outcomes into reputation. The amount of funding universities receive, as well as the citations and prizes awarded to their faculty, determine their peer group—the club to which they belong. They also attract donations and students and affect the university’s ranking.
Research efficiency: Perverse incentivesStephan notes the huge increases in biomedical research budgets in recent decades, and relative declines in funding for physical science. She wonders whether this is for the better, and so do I.
Nature 484, 29–31 (05 April 2012) doi:10.1038/484029a
Counterproductive financial incentives divert time and resources from the scientific enterprise. We should spend the money more wisely, says Paula Stephan.