The idea that money makes the world go round may not quite enjoy the status of a scientific law, but as Paula Stephan shows in this original and engaging book, scientists are as susceptible as anyone to the flash of hard cash. Stephan, who is professor of economics at Georgia State University, sets out to explain how the insights of economics are vital to making sense of contemporary science.
The first half of the book provides a comprehensive account of the way costs and incentives influence research policies and practices. Stephan focuses on the US, the system she knows best, but often draws international comparisons. Starting from the ostensibly simple motivations that many scientists describe - a desire to understand the world, to solve puzzles or to experience the "wow-feeling of discovery" - she quickly complicates the picture by discussing other forms of recognition and reward, including publication and citation, the award of prizes and membership of scientific bodies.
If some incentives are particular to the scientific community, others are more universal. Stephen Jay Gould once observed that scientists want "status, wealth and power, like everyone else". In her chapter on money, Stephan doesn't disagree, but offers a perceptive analysis of the influence of salaries, patents, spin-offs and consulting on research cultures. "No-one", she concludes, "would become a scientist solely for the money." But success in science increasingly brings monetary rewards, and "scientists are not immune to their allure".
Stephan is at her most insightful when describing the landscape for research funding, which in 2009 amounted to almost $55 billion (£35 billion) across US universities. She evaluates the pros and cons of different mechanisms for allocating funds, including peer review, prizes or block grants, and concludes that none is without drawbacks. But the reliance of many US scientists on repeated cycles of grant funding from the National Institutes of Health or the National Science Foundation is increasingly problematic.
From an economist's perspective, the system is grossly inefficient. Researchers spend ever more time applying for, reviewing and administering grant proposals (up to 42 per cent of an average week, according to one 2006 survey). The peer review system tends to reward risk aversion at the expense of creativity. Younger, less established researchers are at a disadvantage: between 1985 and 2008, the average age at which scientists first received independent funding increased from 37.2 to 41.8 years. These problems are exacerbated by "stop-go" flows of funding, and Stephan highlights the perverse consequences of the doubling of the NIH budget between 1998 and 2002, and the 2009 American Recovery and Reinvestment Act, which required an extra $10 billion of funds to be spent on biomedical research in just two years.
The end result, Stephan argues, is a system that "has particularly failed young investigators". The greatest inefficiency is in the "over-supply" of highly trained PhDs in far larger quantities than can ever be absorbed into permanent positions. Universities behave like "high-end shopping malls", building state-of-the-art facilities and leasing them to faculty through indirect costs on grants and the buyout of salary. But the financial risks are also offloaded, particularly to those on soft money, further limiting their appetite for novel research.
Despite these problems, Stephan remains optimistic, and ends by proposing several practical measures that could improve the dynamism and efficiency of the US research system, including limiting the amount of faculty time that can be charged to grants, and weakening the links between research and training. More provocatively, she argues that the current allocation of two-thirds of university research funds to the life sciences, and one-third elsewhere, is "out of balance" and needs reform. Informed, authoritative and thoughtful, Stephan's book will be an invaluable resource for scientists, policymakers and all those working to improve the "science of science and innovation policy" in the US, Europe and further afield.
How Economics Shapes Science
By Paula Stephan
Harvard University Press
Published 26 January 2012