Tag: information policy

Open Government Research—-or Maybe Private Ordering

I came across an interesting information policy scuffle yesterday. It’s worth knowing about in general, and I’ll share my liberconoclastic view of things below.

Congressman Darrell Issa (R-CA) has introduced a bill called the Research Works Act. The consensus is that it’s meant to keep government-funded research from being published for free. This would keep the publication of that research going through scholarly and scientific journals, neatly maintaining profits for an industry that society might not need while restricting public access to research the U.S. taxpayer paid for. (I have my doubts that the language of the bill actually successfully does that, but that’s inconsequential.)

Here’s a good opponent-side article on the bill. The Association of American Publishers likes the bill.

On a discussion list, Jonathan Band articulated how the business of government-funded research works. It’s helpful to know if you haven’t focused on this area before:

  1. Federal and state governments, directly or indirectly, pay salaries of researchers.
  2. Federal government awards grants for specific research projects. Average NIH grant is around $500,000.
  3. Researcher performs the research and writes a draft article about it.
  4. Researcher submits the draft article to publisher.
  5. Publisher requires the researcher to transfer the copyright in the draft article (for free) before it will touch the draft.
  6. Publisher emails the draft article to other researchers in the field.
  7. These “peers” review the article for free as part of their contribution to the field. (As noted in step 1, their salaries are paid by government.)
  8. The researcher revises the draft in response to the peers’ comments.
  9. Publisher does copy editing and publishes article. Publishers acknowledge that their costs per article are under $5,000.
  10. Publisher sells subscriptions to research libraries, which ultimately are largely government funded.

“In other words,” Band concludes, “the public invests $500,000 in the creation of the article, and the publisher invests under $5,000. Yet, the publisher recoups all the profits from the sale of the article. Profit margins for STM publishers exceed 40%.”

I’m inclined to share these concerns. It appears to be a classic example of regulatory controls—in this case, on information—creating supra-normal rents for a particular business sector.

My conclusion is a little different, though. You see, to me, what Band describes is a situation where researchers—who nobody is paying their own money to hire—are doing research that nobody is paying their own money to produce, which results in journal articles that nobody is paying their own money to read. Privatized profit from government-funded research is as anathema to me as the next open government advocate, but I would solve the problem by letting private ordering decide where research dollars go.

Is this a retrograde argument against research? Who could possibly be against research? Publicly funded research is like nutritious vegetables for a healthy modern society!

Well, I’m against researchers, research, and research results that nobody pays their own money for because it’s demanded by political actors responding to political cues. I would rather have research dollars meted out through private ordering, because then research dollars would go to where they’re most likely to produce the scientific and intellectual gains society actually wants.

Tradeoffs are ineluctable: Money spent on government research takes away from private research, or from other priorities such as reducing debt, or reducing taxes so I can spend my money on things like donating to charity or to the impoverished individual of my choice.

Financial Crises as Information Problems

If you haven’t seen it already, be sure to give a read to Friedman Prize winner Hernando de Soto’s recent piece in Business Week, “The Destruction of Economic Facts.” It’s a fascinating perspective on the economic and financial turmoil that is wracking the United States and the world.

As de Soto perceives more easily from working in developing economies, an important input into functioning markets is good information—about property, ownership, debts, and so on. The “destruction of economic facts” is one of the roots of instability and uncertainty in Europe and the United States: “In a few short decades the West undercut 150 years of legal reforms that made the global economy possible.”

The law and markets are information systems, says de Soto:

The rule of law is much more than a dull body of norms: It is a huge, thriving information and management system that filters and processes local data until it is transformed into facts organized in a way that allows us to infer if they hang together and make sense.

If you’re interested in information and transparency, it’s worth a read.