“Give Me Money!”

25 May 2012 at 9:53 am Peter G. Klein 7 comments

| Peter Klein |

I’ve received quite a few emails from various academic organizations asking me to help defeat the Flake Amendment, which would eliminate National Science Foundation funding for political science research. The American Political Science Association is all over this, even publishing a virtual special issue of APSR highlighting NSF-funded research results.

Ironically, none of the arguments I’ve seen for preserving public funding of social science research makes an argument consistent with, well, social-science research. All take the form: “Government funding has supported the following important research findings, which have had the following social benefits.” This argument receives three Fs for research design. First, there is no counterfactual. The point isn’t whether government-funded research result X is good, but whether it’s better than Y, the research result that would have obtained in the absence of government funding. Government funding doesn’t simply increase the quantity of research, it shapes the direction of research. How do we know NSF-funded work isn’t crowding out even more valuable work?

Second, there is no attempt at causal identification. Where are the natural experiments, the randomized controlled trials, the valid instruments? We already know that a main effect of government funding of hard science is to increase the wages of scientists, not the quality or quantity of research. Even if NSF funds good political science research, how do we know the funding is the cause, not the consequence, of the research?

Third, there is no cost-benefit analysis. The lobbying statements simply list purported benefits. Well, sure, the government could give me hundreds of millions of dollars and I’d do some good with it too. Would those benefits exceed the costs? “Political science research has wide-spread effects beyond specific projects,” say the APSA’s talking points. Maybe so, but what about the effects of those goods and services that would have been produced with the taxpayer dollars that went to NSF? Has nobody at the Monkey Cage read Bastiat?

Put differently, I’m certain the APSR would desk-reject an empirical paper with the logical structure of this argument for funding!

My advice to social scientists seeking government funding is to start by acting like social scientists, not K Streeters.

Entry filed under: - Klein -, Methods/Methodology/Theory of Science, Myths and Realities, Public Policy / Political Economy.

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7 Comments Add your own

1. Daniel Kuehn | 25 May 2012 at 10:15 am

You have quite high expectations of research design in mass emails!

Part of the issue with Goolsbee is that he’s looking at relatively short term impacts. Economists studying this labor market since at least the 50s have noted that one of its most important features is a high short-run inelasticity of supply. So yes, in the short run you have much higher wage effects than quantity effects.

This doesn’t hold true in the long run. It’s a good study of Goolsbee’s, consistent with the rest of the literature, but I think it’s often poorly (and for that reason over-) cited.
2. Peter Klein | 25 May 2012 at 10:57 am

Right, but I’m talking about the within-scientist effect. Take the supply of scientists as fixed in the short run. The issue is whether a grant induces the researcher to work on a project he otherwise wouldn’t have worked on, or simply increases his compensation for working on the projects he was already doing or planning to do (salary supplement, equipment and travel funding that benefits his other activities, etc.). APSA seems to assume that the former effect dominates the latter (or that the latter effect is zero). I have plenty of first-hand evidence that the latter effect is common.
3. dkuehn | 25 May 2012 at 1:06 pm

But that’s precisely why we use markets for scientific labor that do respond in the long run. Certainly people will shift what they’re working on. That’s largely the point of bidding up wages, right!

If there is something they would have worked on in the absence of the grant that has a lower value than the stuff they would work on on the grant we don’t want them working on it. We want to bid them away. The trouble is, we’d like a sure method of valuing science that has social payoffs.

Unfortunately political allocation can’t give us that. Unfortunately, the market can’t either.

So we’ve gotta do our best. But I don’t see why it’s a bad thing to bid people off other projects.

And again – insofar as their is bidding off other work, it’s a short-term phenomenon. In the long-run, so long as we do our best to approximate the social value of this research, the bidding away that goes on is bidding away that we’d like to see happen.

I think the issue ultimately should be attaching the right social value to publicly funded research, not being concerned about short-run inelasticities that Goolsbee’s work picks up. If we get the valuation right none of the bidding away should bother us.

And I think good social science tells us two things: positive externalities are underfunded by the market and corner solutions are rarely optimal except in some unusual circumstances. So I think good social science is on the APSA’s side here. Of course there’s a lot more legwork to do to determine the right amount of funding.
4. Peter Klein | 26 May 2012 at 2:17 pm

Positive externalities are ubiquitous. Claiming that the government should fund X because X has positive externalities is not a very strong argument, because it ignores the positive externalities from Y.

BTW I’m not of course expecting a sophisticated discussion of research design in a mass email. But you’d expect the various blogs and websites discussing the issue, the statement from the editor of the field’s flagship journal, the special issue highlighting NSF-funded research, etc. at least to acknowledge these kinds of concerns. They seem blithely unaware that to the typical US taxpayer their pleas come across as simple rent-seeking.
5. stevepostrel | 27 May 2012 at 9:17 pm

If someone wants to argue that the marginal political scientist’s research has higher social value than the marginal set of, say, videogame purchases that it crowds out, I’d like to see a defense. Considering that at least one person at least looks at each videogame, while marginal social science research goes unread, I think you’d have a tough case to make.
6. alastair philp (@ajvphilp) | 2 April 2013 at 4:18 pm

What is the best argument for publicly funding research? Should we just leave it to private commercial or philanthropy support? Would the same arguments apply to state-funded colleges too? Should we only fund ‘useful’ research and education?
7. Peter Klein | 4 April 2013 at 5:14 pm

Well, the standard arguments are the textbook ones about positive externalities and public goods. But I think those arguments are much weaker than typically presented.