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A Theoretical Analysis of Public Funding for Research

  • Gianni De Fraja

    ()

This paper studies government funding for scientific research. Funds must be distributed among different research institutions and allocated between basic and applied research. Informational constraints prevent less productive institutions to be given any government funding. In order to internalise the beneficial effects of research, the government requires the most productive institutions to carry out more applied research than they would like. Funding for basic research is used by the government to induce more productive institutions to carry out more applied research then they would like.

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File URL: http://www.le.ac.uk/economics/research/repec/lec/leecon/dp11-31.pdf
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Paper provided by Department of Economics, University of Leicester in its series Discussion Papers in Economics with number 11/31.

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Date of creation: May 2011
Date of revision: Jun 2011
Handle: RePEc:lec:leecon:11/31
Contact details of provider: Postal: Department of Economics University of Leicester, University Road. Leicester. LE1 7RH. UK
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Web page: http://www2.le.ac.uk/departments/economicsEmail:


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  1. Marie Thursby & Richard Jensen, 2001. "Proofs and Prototypes for Sale: The Licensing of University Inventions," American Economic Review, American Economic Association, vol. 91(1), pages 240-259, March.
  2. Mansfield, Edwin, 1980. "Basic Research and Productivity Increase in Manufacturing," American Economic Review, American Economic Association, vol. 70(5), pages 863-73, December.
  3. Philippe Aghion & Mathias Dewatripont & Jeremy C. Stein, 2005. "Academic Freedom, Private-Sector Focus, and the Process of Innovation," NBER Working Papers 11542, National Bureau of Economic Research, Inc.
  4. repec:cup:cbooks:9780521337465 is not listed on IDEAS
  5. Macho-Stadler Inés & Pérez-Castrillo David & Veugelers Reinhilde, 2005. "Licensing of University Inventions: The Role of a Technology Transfer Office," Working Papers 201022, Fundacion BBVA / BBVA Foundation.
  6. Palomino, Frederic & Sakovics, Jozsef, 2004. "Inter-league competition for talent vs. competitive balance," International Journal of Industrial Organization, Elsevier, vol. 22(6), pages 783-797, June.
  7. Evenson, Robert E & Kislev, Yoav, 1976. "A Stochastic Model of Applied Research," Journal of Political Economy, University of Chicago Press, vol. 84(2), pages 265-81, April.
  8. Link, Albert N, 1981. "Basic Research and Productivity Increase in Manufacturing: Additional Evidence," American Economic Review, American Economic Association, vol. 71(5), pages 1111-12, December.
  9. De Fraja, Gianni & Valbonesi, Paola, 2008. "The Design of the University System," CEPR Discussion Papers 7038, C.E.P.R. Discussion Papers.
  10. repec:cup:cbooks:9780521331586 is not listed on IDEAS
  11. Amon, Christian & Gersbach, Hans & Sorger, Gerhard, 2010. "Hierarchical Growth: Basic and Applied Research," CEPR Discussion Papers 7950, C.E.P.R. Discussion Papers.
  12. Jean-Jacques Laffont & Jean Tirole, 1993. "A Theory of Incentives in Procurement and Regulation," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262121743, June.
  13. Paula E. Stephan, 1996. "The Economics of Science," Journal of Economic Literature, American Economic Association, vol. 34(3), pages 1199-1235, September.
  14. Gersbach, Hans & Schneider, Maik & Schneller, Olivier, 2010. "Optimal Mix of Applied and Basic Research, Distance to Frontier, and Openness," CEPR Discussion Papers 7795, C.E.P.R. Discussion Papers.
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