One of the great insights of modern growth theory -- Paul Romer's Nobel Prize -- is that ideas are the foundation of economic growth. Ideas are also "nonrivial." If you use my car, I can't use it, but if you use our family recipe for road-oil chocolate cake (yum), we can still enjoy it as much as ever. Once an idea has been had, economics says it should be used as widely as possible as soon as possible
But coming up with ideas is expensive. And aside patent protections, I can't charge for the benefit to you of my new ideas. So, economists naturally notice the mother of all public goods. Research -- finding new ideas -- has enormous benefits, and people will not naturally devote enough resources to finding, refining, implementing new ideas. So, economists conclude, the government should subsidize idea-production.
But which ideas? Now we face the conundrum. It's just as easy to subsidize bad idea production as good idea production, and it's even easier to waste money and produce no new ideas at all. How to subsidize actual productive ideas is a hard question of bureaucratic structure. The economics of science is, I think, vastly understudied. How can government agencies or philanthropies give away money and actually do good? This topic is especially relevant as we contemplate a big ramp-up in federal spending.
Enter today's topic, a fascinating review of Fast Grants by Patrick Collison, Tyler Cowen, and Patrick Hsu. Read first the Marginal Revolution summary, then the full article.
I found it as interesting for its insights into the pathologies of our current system for subsidizing research as for its summary of how well fast grants worked.
They survey fast grant recipients. Despite being in an evident crisis, and $5 trillion being shoveled out the door...
64% of respondents told us that the work in question wouldn’t have happened without receiving a Fast Grant.
We know that applying for grants is drudgery, butFor example, SalivaDirect, the highly successful spit test from Yale University, was not able to get timely funding from its own School of Public Health, even though Yale has an endowment of over $30 billion. Fast Grants also made numerous grants to UC Berkeley researchers, and the UC Berkeley press office itself reported in May 2020: “One notably absent funder, however, is the federal government. While federal agencies have announced that researchers can apply to repurpose existing funds toward Covid-19 research and have promised new emergency funds to projects focused on the pandemic, disbursement has been painfully slow. …Despite many UC Berkeley proposals submitted to the National Institutes of Health since the pandemic began, none have been granted.” [Emphasis ours.]
57% of respondents told us that they spend more than one quarter of their time on grant applications. This seems crazy. We spend enormous effort training scientists who are then forced to spend a significant fraction of their time seeking alms instead of focusing on the research they’ve been hired to pursue.
I have heard many anecdotes how the research funding mechanism skews research to incremental, or currently fashionable topics. (MRNA research struggled for years!)
In our survey of the scientists who received Fast Grants, 78% said that they would change their research program “a lot” if their existing funding could be spent in an unconstrained fashion. ...
81% percent of those who responded said their research programs would become more ambitious if they had such flexible funding. 62% said that they would pursue work outside of their standard field (which the NIH explicitly discourages), and 44% said that they would pursue more hypotheses that others see as unlikely (which, as a result of its consensus-oriented ranking mechanisms, the NIH also selects against).
Many people complain that modern science is too frequently focused on incremental discoveries. To us, this survey makes clear that such conservatism is not the preference of the scientists themselves. Instead, we’ve inadvertently built a system that clips the wings of the world’s smartest researchers, and this is a long-term mistake.
...the current grant funding apparatus does not allow some of the best scientists in the world to pursue the research agendas that they themselves think are best.
...The entities involved in science funding, most notably the NIH, demand long applications and subject those applications to multiple stages of administrative review, written and in-person peer review, program officer review, advisory council review, and even council of councils review. Consensus plays a heavy role. Scientists are discouraged from pursuing research outside of their regular fields and there is a strong preference for funding late-career rather than younger individuals.
...According to the NIH, a grant application will typically result in a decision after something between 200 and 600 days.
That's a long time! Ideas build on each other, so the speed of economic growth depends on the speed of new idea production and implementation. The grant application process is starting to look like the construction permitting process, with the same results.
But we are economists. Not everything is screwed up because of stupidity. When giving away money, especially taxpayer's money, there is always a danger of fraud, nepotism, corruption, favoritism, waste. The fast grants structure (below) is interesting. But do government and private science subsidy bureaucracies not adopt it because they just hadn't thought of it? That's possible -- institutional innovation happens too. But it surely is a question worth asking. Are the institutional incentives of the NIH and NSF the problem? (See for example the astonishingly screwed up incentives for regulating Nuclear Power.) I don't see signs that they are rewarded for producing useful and speedy research. CYA behavior from bureaucracies does result from CYA incentives.
They link to a good article by José Luis Ricón, "We don't know how to fix science," which I recommend as documentation for how little is known about the science and economics of science, how many simple cocktail party ideas -- fund people, not proposals, allocate randomly -- remain on the table.
Collison, Cowen and Hsu acknowledge a few things that did work if not perfectly. In the end we want to build on positive models not just disparage failures.
We would not have had vaccine candidates as quickly as we did without a great deal of basic science work painstakingly pursued (sometimes for decades) by people like Katalin Karikó, Kizzmekia Corbett, Jason McLellan, and many hundreds of others.... This research ultimately was supported and that is no small feat. The funders involved (the NIH included) deserve our great gratitude. On the translation front, Moderna, BioNTech, and Novavax, creators of the vaccine candidates that performed best in clinical trials, all started out as privately backed biotech startups that relied on risk-tolerant funders, underscoring the importance of a vibrant private ecosystem.
Operation Warp Speed, an interagency project that the NIH and FDA both participated in, was an excellent and successful example of bold action and also institutional courage. We were able to produce vaccines as quickly as we did in part because the NIH funded three grants at UT Austin before 2020; thanks to these, we had a stabilized spike protein ready to go...It’s also important to note a lot of the unglamorous infrastructure that enabled science to progress quickly during the pandemic, such as databases maintained by the National Center for Biotechnology Information (NCBI, part of the U.S. National Library of Medicine), are enabled and funded by the NIH and other public funding bodies.
Fast Grants
The original vision was simple: an application form that would take scientists less than 30 minutes to complete and that would deliver funding decisions within 48 hours, with money following a few days later.
...To help identify the most immediately deserving recipients, our criteria were quite stringent: eligibility was restricted to “principal investigators” (that is, scientists running their own labs or research programs) who were already working on COVID-19-related research (rather than those who merely had ideas as to how they could be).
...Within a few days, we started to distribute millions of dollars of grants, and, over the course of 2020, we raised over $50 million and made over 260 grants. All of this was done at a cost of less than 3% Mercatus overhead...
The grant applications were refereed by a team of 20 mostly early-career individuals drawn from top universities and labs, who worked hard to vet and review the more than 6,000 applications received over the course of the program. Every funded application was reviewed by at least three reviewers, but unanimity was not required: the goal was to identify projects that at least one or two reviewers thought were very much worth funding. (Successful NIH grant applications, on the other hand, are typically reviewed by 10-20 scientists and program officers across three phases of review.)
“Let’s do it” was then the basic attitude and we were much more worried about missing out on supporting important work than looking silly.
...We allowed research teams to repurpose funds in any plausible manner, as long as they were used for research related to COVID-19. Besides the 20 reviewers, from whom perhaps 20-40 hours each was required, the total Fast Grants staff consisted of four part-time individuals, each of whom spent a few hours per week on the project after the initial setup.
We give examples of actions Fast Grants took not to indicate some kind of supposed brilliance but rather to emphasize the opposite: Fast Grants pursued low-hanging fruit and picked the most obvious bets. What was unusual about it was not any cleverness in coming up with smart things to fund, but just finding a mechanism for actually doing so.
This blog usually sympathetic to private solutions. And billions sitting in philanthropic organizations such as the Gates foundation, or university endowments seem like a natural source of financing for basic research. The Medici funded Galileo, and though science is bigger, so are pots of wealth. But
We found it interesting that relatively few organizations contributed to Fast Grants. The project seemed a bit weird and individuals seemed much more willing to take the “risk”. (That said, a few institutions did contribute substantial amounts, and we’re very grateful to those that did.) Beyond Fast Grants, we suspect that a lot of valuable projects in the world are blocked on something like this: the willingness of funders (especially institutional funders) to support something unusual simply on the basis of belief in the individuals involved. Too often, the de facto goal of funders is to find established things that look like everything else — it is typically easier to defend supporting a long-established institution. But, of course, the most valuable opportunities will often be those that look quite different, and a structural bias towards familiarity can easily militate against innovation.
This comment also suggests a way that Fast Grants needs an underlying ecosystem. They fund people with reputations, but where did those people get those reputations?
Regular vs emergency mode?
Collison, Cowen and Hsu were motivated by an expectation that the US would Shift from "regular mode" to "pandemic mode," and astonishment that this did not happen.
As the first U.S. lockdowns commenced in March last year, we reached out to various top scientists, and were surprised to learn that funding for COVID-19 related science was not readily available. We expected the U.S.’s immense government funding systems to be unleashed, with decisions made in days if not in hours. This is what happened during World War II, which killed fewer Americans.
Instead, we found that scientists — among them the world’s leading virologists and coronavirus researchers — were stuck on hold, waiting for decisions about whether they could repurpose their existing funding for this exponentially growing catastrophe. It’s worth visiting the National Institutes of Health (NIH)’s application overview for this, launched in March 2020, to get a tangible sense for what those seeking emergency funding were facing.
But why are we not always in pandemic mode? What purpose does the bureaucracy and delay serve in normal times?
The failure of science in the pandemic
Where is the science? The story of this pandemic must include big failures of the science establishment.
the U.S. did virtually no surveillance sequencing in January or February, even as outbreaks took hold in China and Italy. The CDC botched the initial diagnostic test. Even once working tests existed, they remained invariably slow and hard to obtain for members of the public. We didn’t get off on a good foot.
And to this day,
as numerous variants of concern — such as B.117 and B.1.351 — took hold late in 2020 and in early 2021, we were surprised that the U.S. was engaging in very little surveillance sequencing with sufficiently fast turnaround to detect their real-time spread.
A year after Pearl Harbor, the US was cranking out ships and airplanes. A year later and the basic infrastructure of monitoring the spread of the disease seems to be lacking. I use the word "infrastructure" deliberately.
from The Grumpy Economist https://ift.tt/3jsrwXp
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