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Economics, Politics, and Government Research and Development
Pages 59-74

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From page 59...
... The authors are grateful to research support from Ache Caltech Energy Policy Studies Program, . _ ~ ~ ~— the Brookings Institution, the Guggenheim Foundation, ache Center for Advanced S tudy in ache Behavioral Sciences, the National Science Foundation, and the Hoover Institution.
From page 60...
... A public official cannot achieve either altruis~cic or selfishly personal goals in public service unless he or she takes account of the necessity for elected politicians to be successful in seeking reelection. This fact not only influences the strategies of — 60 —
From page 61...
... In a few industries, economic weil-being is highly dependent on who gets government contracts. Hence, voters will evaluate political leaders in part on the basis of the distribution of program expenditures as well as the net Social benefits of the program that Me expenditures make possible.
From page 62...
... Consequently, public officials would prefer to appropriate funds to proj ecus whose beneficiaries are Mown at ache beginning, so political credit can be claimed effectively for the next election. Risk aversion is induced further by eke fact that elected officials usually face ~ very high probability of reelection.
From page 63...
... They can be connected readily to one of the very few salient political issues or which elections normally turn. One example is the stance of national defense; another was energy policy after the rapid increase in the price of oil in the 1970' s .
From page 64...
... This type of R&D also faces the problem cuff malting ache best trade-off between short- term proj ecus promising relatively quick but small technical advances versus riskier, longer acerb proj eats that may produce revolutionary changes in technology. However, because the government is the consumer of the product and because political officials will be held accoun~cable for the state of technology in important government areas (such as defense)
From page 65...
... The purpose of the early research is deco undertake relatively low- cost activities Chat increase the probability that a right choice will be made when the Acme comes to commit mad or resources to ache program. However, since the latter step is so highly valued by political decisionmakers as the fistic "risible sign of progress, political incentives push program management to foreshc~r~cen the research phase of ~ de~relopmen~cal research program and commit too early deco a design.
From page 66...
... or expendi~cure and the later decision deco cut it back. Because constituents and9 hence, political leaders discount the future excessively and evaluate programs heavily on current activity levels, the political benefits of promising an expenditure is the future are less than the political costs of canceling a current program.
From page 67...
... Clinch River was a follow-on to the development of light-water nuclear reactors for generating electric power, a program t.ha~c in the early 1970's also was regarded widely as a success. Both programs were justified deco Congress as economically warranted: Clinch River as a means to guarantee relatively cheap fuel for nuclear reac~cors in anticipation of enormous growth in their use for genera~cing electricity combined with pessimistic forecasts about the availability of uranium from reliable sources; the Space Shuttle as a means of lowering the cost of launching very large payloads and of retrieving payloads for repair and relaunch .
From page 68...
... Many technical innovations developed under the auspices of ache program were adopted by commercial sate111te users and manufacturers. Then, in the early 19709 s, the program was promptly killed witch Congress sally removing from the budget the developmental feds for the next generation of expert mends .
From page 69...
... Soon thereafter, ache Synthetic Fuels Corporation was created deco finance the me jor proj ects .
From page 70...
... Unlike the Clinch River Breeder Reactor and the Space Shuttle, changed circumstances and sober reflection =bout the program' s merits could produce a reprogramming and scaling down because the most visible stage of the proj ecu had no~c yet been entered.
From page 71...
... Public officials are likely to be leery of programs that might fat1- - and especially of programs in which the failure plausibly can be laid on their doorsteps. The lesson: Governmen~c is not likely to be a very effective source of support for developing radical nest technological assurances for ache private sector.
From page 72...
... It is most bountiful when it is tied to salient national political issues, as high energy physics is tied Deco defense and as biomedical research is tied to health. This suggests that continued support for basic research depends on the efforts of its supporters deco publicize ache results and their potential utile ity.
From page 73...
... The Case of the Space Shuttle, ~ and Linda Cohen. "lathe Clinch River Breeder Reactor," revised versions of which will appear in Linda R


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