Donald Stokes (1997) observes that the public values science “not for what it is but what it is for.” A perennial question in U.S. science and technology policy is what benefits taxpayers obtain from publicly funded biomedical research. Recent concerns about the clinical and economic returns to NIH funding in the post-doubling era reflect this emphasis.

In this paper, we review the evidence on the effects of publicly funded biomedical research. Reflecting Stokes’s observation above, the review will focus on the health and economic effects of public research, rather than measures of scientific outcomes. Given the prominence of the NIH in funding this research, many of the published articles and research focus on this agency. The evidence examined includes quantitative analyses, and qualitative case studies, published by scholars from a range of fields. While we have made efforts to be broad, the references discussed should be viewed as representative rather than exhaustive. This review takes stock of the empirical methodologies employed and the types of data used; it also highlights common research and evaluation challenges, and emphasizes where existing evidence is more, or less, robust.

We proceed as follows. In Section II, below, we discuss a stylized model of how public research funding affects health, economic, and intermediate outcomes. As Kline and Rosenberg (1986), Gelijns and Rosenberg (1994), and others have emphasized, the research process cannot be reduced to a neat, linear model. While we recognize this fact (and highlight it in our literature review) the simple model is still useful in helping to organize our discussion of theory and data on the effects of publicly funded research. In Section III, we discuss the empirical evidence. In Section IV, we discuss common evaluation difficulties. In Section V, we conclude. The empirical approaches, data sources, and findings of many of the studies reviewed are also summarized in Tables D1D3.


Figure D-1 is a simple model illustrating how the literature has conceptualized the health and economic effects of publicly funded biomedical research (and publicly funded research more generally):

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