However, because of mounting budgetary pressures generally, and increasing costs of public information management specifically, government database providers worldwide have recently been coming under pressure to recover all costs, rather than only the cost of distribution. This pressure toward full cost recovery results both from the rising costs associated with the rapidly expanding rate of data collection and from foreign pressures. European governments, for example, are turning increasingly to a full cost recovery approach for their S&T database production and dissemination activities. The E.U. Database Directive puts considerable pressure on non-E.U. countries, including the United States, to do the same.14 Although existing law in the United States precludes adoption of such restrictions for government data, the enactment of a strong new database protection statute for private-sector databases could stimulate further interest in privatizing U.S. government database dissemination activities. By making databases more profitable, new protectionist legislation could shift responsibility for their creation from the public-sector to the private-sector. The social harm of such a shift would be an increase in the price for access, especially for highly specialized databases—such as some S&T databases—with a comparatively small market. A possible social benefit would be that the private-sector would be subjected to a weak market test of whether the value of the databases exceeded their cost. As noted above, however, most data collected by public agencies are raw data whose full potential value has not yet been realized, and in many cases, user-oriented transformations of the data are already in the hands of the private and nonprofit organizations that might have a better sense of the user market.

Pressures for cost recovery also arise because the benefits that accrue to consumers and the broader society under the efficient-access pricing model are harder for legislators and administration policy makers to see (and measure) than those that accrue as reduced tax burdens under the cost-recovery model, or those that accrue as increased profits under the commercial model. Thus, science agencies in the United States are increasingly turning to the private-sector, to both not-for-profit and commercial entities, in outsourcing government S&T database dissemination activities, or even to purchase data from commercial suppliers. For example, in order to promote private-sector investment and development of space technologies and applications, the Commercial Space Act of 1998 encourages NASA—an agency engaged to a substantial degree in basic research activities—to purchase space and Earth science data products and services from the private -sector, and to treat data as a commercial commodity under federal procurement regulations. The potential negative effects of this trend are discussed in some detail in Chapter 4.


" Income taxes are held in high regard by many public sector economists .... (They are) seen as being reasonably efficient, based on large empirical literature which indicates that the supply of labor and capital are both extremely price inelastic."


See Stephen M. Maurer (1999), "Raw Knowledge: Protecting Technical Databases for Science and Industry," Appendix C in the online workshop Proceedings, note 9.

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