November 17, 2023

Is It Worth Applying For Competitive Grants?

New paper on the challenge of funding science

A new economics paper examines how different rules for allocating research funding across scientific fields can create unintended incentives that influence where researchers apply for grants. The analysis sheds light on the tradeoffs involved in distributing limited budgets.

Funding science is tricky. We want to allocate funds to support the best research ideas and most talented scientists. But evaluating the merit of grant proposals involves subjective expert judgment, not an objective formula. So review panels in each field play a big role in deciding which projects get funded.

The Problem of Comparing Apples and Oranges

Here's the dilemma. Fields like physics or molecular biology where experts broadly agree on what constitutes high quality research tend to be more "consensual". Other fields like sociology or history with less consensus are "noisier" - reviewers often disagree more about the merit of proposals.

How should we allocate funds across diverse fields that are hard to compare? Many agencies do it proportionally, dividing up the budget based on the number of applications received in each area. Seems fair, right?

The Dark Side of Proportional Funding

It turns out proportional funding rules create bad incentives. Noisy fields with less consensus get more applications and more money. Consensual fields get fewer proposals, so they're underfunded.

The economics paper shows funding applications decrease when evaluation gets more accurate - the "paradox of relative evaluation". grading on the curve discourages even top researchers in consensual fields from applying when their odds look dicey. So noise begets money under proportional allocation.

Potential Solutions

But all is not lost. The study finds simple fixes like pooling review panels across fields can help dampen this unhealthy competition. Benchmarking applications against past years is another solution. Better understanding these distortions is key to designing funding systems that direct resources to where they can do the most good.

Read the full paper by Jerome Adda and Marco Ottaviani here