Using Natural Science and Engineering Research Council Canada (NSERC) statistics, we show that the $40,000 (Canadian) cost of preparation for a grant application and rejection by peer review in 2007 exceeded that of giving every qualified investigator a direct baseline discovery grant of $30,000 (average grant). This means the Canadian Federal Government could institute direct grants for 100% of qualified applicants for the same money. We anticipate that the net result would be more and better research since more research would be conducted at the critical idea or discovery stage. Control of quality is assured through university hiring, promotion and tenure proceedings, journal reviews of submitted work, and the patent process, whose collective scrutiny far exceeds that of grant peer review. The greater efficiency in use of grant funds and increased innovation with baseline funding would provide a means of achieving the goals of the recent Canadian Value for Money and Accountability Review. We suggest that developing countries could leapfrog ahead by adopting from the start science grant systems that encourage innovation.
I don't often see examples of over-dissipation of rents. On the other hand, I'd fully expect the number of grant applications to increase somewhat if NSERC shifted to an "everybody gets $30K" policy. I'd fully expect the authors to have addressed this, but I'll have to wait 'till InterLibrary Loans sends me the article to tell.
HT: Paul Wells, who also points to discussion of this article over on Science Blogs.