Do Congressional Earmarks Increase Research Output at Universities?

For twenty years universities have been able to bypass peer-reviewed research competition for federal funding and seek a direct appropriation of funding from Congress. Proponents of this earmarking claim that this funding helps the university build the infrastructure needed to be able to compete for peer-reviewed funding. Opponents claim this funding is used poorly and is less than productive than peer-reviewed funding. This paper attempts to answer this question by examining whether earmarked funding, when treated as a stock of capital, increases the number of academic articles published and/or the number of citations per article published. Using two panel data sets that span 1980 to 1998, incorporating university and year fixed effects, and using an instrumental variables estimation, this paper shows that while the number of articles published increase, the number of citations per article decrease. Depending on the data set used the annual increase in articles ranges, on average, between 8 and 14 percent. The annual decrease in citations per article ranges between 9 and 57 percent. If we concentrate only on earmarks for agriculture, earmarks that often are for small discrete projects, the results suggest the effect from an increase in earmarked funding is not statistically different from zero for both publications and citations per publication. These results suggest that earmarked funding may increase the quantity of publications but decreases the quality of the publications and the performance of earmarked funding is lower than that from using peer-reviewed funding.