Princeton’s Alan B. Krueger had an interesting commentary on academic earmarks in last week’s New York Times. Krueger writes,

“Increasingly, universities are being financed like farmers and military contractors, with legislative earmarks. According to The Chronicle of Higher Education, there were 1,964 earmarks to 716 academic institutions costing a total of $2 billion in the 2003 fiscal year, or just over 10 percent of the federal money spent on academic research. From 1996 to 2003, the amount spent on academic earmarks grew at an astounding rate of 31 percent a year, after adjusting for inflation. Earmarks contrast with the way the government finances most university projects, which is through open competitions for grants. In these competitions, agencies like the National Science Foundation and the National Institutes of Health review grant applications, often consulting with outside experts, and base awards on the applications’ perceived merit. Earmarks are decided by a political process, without external peer review. As academic earmarks have grown, so have universities’ lobbying expenditures. Spending on lobbying jumped to $62 million in 2003 from $23 million in 1998, according to The Chronicle of Higher Education.”

Krueger cites several studies of earmarking. One study looked at the period 1997-1999 and found, not surprisingly, that the presence of a member of congress on a House or Senate appropriations subcommittee is a critical variable in explaining earmarking awards. The study also found that lobbying efforts have a significant monetary return to universities, which explains the growth in university lobbying efforts. Krueger cites another interesting study,

“A. Abigail Payne, an economist at McMaster University in Canada, has studied how earmarks affect the quantity and quality of academic research, inferring quality from the number of times research studies are cited by subsequent studies. She concludes that ‘earmarked funding may increase the quantity of publications but decrease the quality of the publications and the performance of earmarked funding is lower than that from using peer-reviewed funding.’”

Krueger concludes, “Indications are that academic earmarks crowd out spending on competitive peer-reviewed grants, at least in the short run. The competitive merit-based system that has financed most academic research since World War II is probably one reason the United States has been pre-eminent in science and higher education. If academic earmarks continue to grow at an exponential rate, this system could be in jeopardy. Slowing the growth of academic earmarks would require a concerted effort by American universities to shun the practice, or a new consensus in Congress to finance academic research only through the competitive merit-based process. The Association of American Universities, a group of 62 elite research universities, is currently re-examining its position on earmarks, and could send a strong signal by unequivocally rejecting the practice.”

Here at the University of Colorado-Boulder I serve on the chancellor’s advisory committee on federal relations, which includes lobbying and earmarking. I have proposed that Colorado adopt and publicize a general policy of not accepting academic earmarks, with an ability to make exceptions on a case by case basis. I have proposed that we take a close look at such a policy in place at the University of Michigan as a possible model. It’ll be interesting to see how my colleagues respond to such a proposal. The lure of earmarking is strong. But the consequences are significant.