The Hazards of Government-Supported Research

I just had to pass this one on. From Marketing Japan via Mish Shedlock comes this report:

None of the government’s 214 biomass promotion projects — with public funding coming to Â¥6.55 trillion — over the past six years has produced effective results in the struggle against global warming, according to an official report released Tuesday.

The Internal Affairs and Communications Ministry, which evaluates public works projects, urged the agriculture and five other ministries conducting biomass projects using sewage sludge, garbage and wood, to take corrective action.

The Administrative Evaluation Bureau found in a study of biomass projects through March 2009 that the cumulative budget totaled about ¥6.55 trillion.

The six ministries taking part in such projects, however, have yet to confirm the financial results for 92, or 44 percent, of the 214 projects, with one bureau official saying: “The figures tell everything. The ministries need to produce certain results because they are using taxpayers’ money.”

The Agriculture, Forestry and Fisheries Ministry spent about ¥1.6 billion on a project to produce livestock feedstuff from unsold boxed lunches from convenience stores. The project was abandoned after its management firm collapsed, the report says.

The Environment Ministry and the Ministry of Economy, Trade and Industry were subsidizing similar projects at the same time, it said.

While the six ministries have argued that 161, or 75 percent, of the 214 projects have produced some results, the bureau concluded that none has produced results that would lead to the formation of a recycling-based society, the report says.

The emphasis is mine. $68 billion (Â¥6.55 trillion) sounds like a lot of money to me.

I have no opposition to research as such and, especially, no opposition to government support of research. I have previously expressed a prejudice in favor of mass engineering projects (e.g. the space program, the Manhattan Project) as the mechanism for such research and this provides a good illustration of why that might be. Well, I guess that at least the Japanese now know 214 approaches that won’t get them where they want to go.

It probably should be pointed out that there are opportunity costs involved and investing in approaches that didn’t prove fruitful undoubtedly crowded out some approaches that might have been. Not every project gets approved because it has merit. Some are approved because somebody’s brother-in-law owns the company or the receptionist is cute.

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