Frederick Sachs writes in theThe Scientist
Complaints by scientists about the flat NIH budget have grown louder in recent years. For scientists to effectively lobby Congress for increased funding, however, we need to show that increased funding increases productivity. Given this need, I decided to examine scientific productivity as a function of the budget. Since the NIH budget doubled from $15 billion to $26.4 billion from 1999 to 2003, I reasoned that there should have been a corresponding jump in productivity. The test was the simplest measure of productivity: the number of publications.
Here's what I found: The number of biomedical publications from US labs did in fact increase from 1999-2004. However, so did the number of publications from labs outside the US where the research budget did not double. ... There is no upward jump that you would expect to see with a sudden increase in productivity.
While this is a unidimensional look at productivity (it does not take into account any potential impact of the research), it is pretty discouraging, but not surprising that the government can not efficiently purchase R&D. In addition, it imposes a tremendous amount of overhead on universities (to prevent fraud). Our overhead rates on federal contracts are in the 40-50 percent range. Historically this funded utilities, the upkeep of research labs and the like, but now it funds auditors, contract administrators, and an entire university bureaucracy devoted to obtaining and administering even more grants. Just look at your alumni magazines. They are now almost 100 percent glossy descriptions of all the cool research going on at the old U.