Australian Research Funding

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Australian readers may have seen the criticisms I made of the Australian Research Council’s (ARC‘s) funding process  in Erica Cervini’s article “Show us the Money“, published in The Age and the Sydney Morning Herald in the last week. The basic proposition was that the system is likely to support research in an existing paradigm, and reject exploration of alternatives to that paradigm:

If Albert Einstein had applied for an Australian research grant, he may never have developed his theory of relativity. Those supporting the old style of physics would have stopped him obtaining funding, says an associate professor in economics and finance at the University of Western Sydney, Steve Keen.

”If Einstein needed time or money to build his theory, he’d never have got them under the Australian Research Council,” he says.

Keen uses the example to illustrate how tough he says it is for people with unorthodox views to win research grants from the council, the independent body responsible for managing the national competitive grants program, the pre-eminent Australian research awards.

The ARC is supposed to allocate the government’s money wisely to support research by Australia’s academics, but because it uses a peer review approach to decide which proposals are worth funding, it is inherently biased against innovative research. If a new researcher in a field formed the opinion that a currently insoluble problem (say, the results of  “Black Body” radiation experiments) might just require a fundamental shift in thinking (such assuming that there was a fundamental minimum value for energy, rather than it being a continuous variable), it is highly unlikely that established researchers would think his idea worthy of funding. Yet that idea might be right and the established way of thinking wrong.

We’re rather lucky that Max Planck wasn’t relying on the ARC for funding, but instead got his support from a commercial source (quoting Wikipedia, Planck “had been commissioned by electric companies to create maximum light from lightbulbs with minimum energy”); so ultimately the concept of quantum mechanics was born.

Perish the thought that the Australian government might waste its research funds on such silly ideas! Instead there is an enormous bureacuracy–starting at the ARC itself, but more importantly replicated throughout Australian universities as they vie for research funding–devoted to applying the peer review system to make sure that this government money is wisely spent.

The irony is that this “be careful with our money” attitude ends up ensuring that the money will rarely if ever be used to achieve fundamental progress. If they want ARC funding, academics have to spend literally months each year drafting proposals which are then reviewed by other academics to decide which projects actually get funding. This is inherently a way of ensuring that only ideas that are extensions of currently accepted thought will get funded.

The fallacy in this process is that it flies in the face of how scientific progress occurs–the concept that there are “paradigms” in sciences, that progress involves both work within a paradigm that advances it (“normal science”), and infrequent “paradigm shifts” that constitute a scientific revolution, have literally become cliches of modern speech (they were first developed by Thomas Kuhn, though the scientific area itself has moved on somewhat). Yet the ARC’s funding methods are eminently suited to normal science, and biased against scientific revolutions which are the events that really advance human knowledge.

It would be bad enough if that was all that was wrong with the system, but in true Australian style, the procedure adds an enormous and expensive bureaucratic overlay to a flawed methodology. There has been some progress in methods since Geoff Davies’ excellent swipe at the system from two years ago in The Australian, but Geoff’s criticisms are still largely valid:

ACROSS the nation, Australia’s best and brightest researchers, supported by expensive teams of administrators, have been devoting weeks of their time to such deep and eternal questions as: Are all the pages correctly numbered, including the first page?…

We are encouraged to join with overseas collaborators. However they must also supply minutiae about themselves and their institution, and be authorised at a high level of their institution, even if they themselves are the responsible authority for research expenditure. These requirements are presumptuous, and insulting to our distinguished overseas colleagues.

University authorities live in fear that a phrase that could be read as disparaging to the ARC might slip through, and bring the wrath of the overlords down upon them.

So tempers fray, administrators hire extra help and are driven to distraction, researchers are kept from their research and monumental amounts of time and money are wasted.

Of course, it’s understandable that the public–and their political representatives–want a monitoring process to improve the odds that funds for research are allocated wisely. But as I argue above, the system we use actually works against this, and for a simple reason: real research involves the risk of blind alleys, yet the ARC’s monitoring process is designed to make it highly unlikely that any alternative alleys will be explored. Rather than risk one blind alley, the scheme sticks to the highways instead. It’s therefore a means of monitoring the public’s research money that almost guarantees that real research won’t be funded.

Similar points are made by Professor Bryan Gaensler, an astronomer and ARC Federation Fellow in the School of Physics at the University of Sydney. Though he has done very well out of the ARC, he contends that the system rewards conventional thought rather than innovation:

The way scientific research is funded in Australia’s universities puts an excessive emphasis on guaranteed results at the expense of adventurous ideas and major breakthroughs…

It is often the innovator from a different research field who ends up turning the problem completely on its head, and it is sometimes the obscure “blue sky” experiment that acts as the catalyst to create entire new industries or solutions.

Unfortunately, Australia’s potential for discovery and innovation is being held back by a system that encourages our scientists to play it safe, to follow traditional paths in their research and to steer clear of avant-garde experiments that might lead to spectacular breakthroughs.

Australia’s system doesn’t have to be this bad. Geoff Davies notes that the Canadian system is far more effective at funding research while minimising the potential for waste:

In Canada, you submit a brief proposal summarising your research accomplishments for the past three years. All proposals are read fully by the discipline panel. If your work has been excellent, your funding may be increased. If it has not been so good your funding may be reduced, but won’t be instantly cut off. Once you are funded you are free to follow wherever your discoveries take you, bearing in mind that you will be evaluated again in three years.

This system is based on work actually accomplished, rather than half-baked claims of what may be accomplished, it readily accommodates the serendipity of research, it is far more efficient, it is fairer and the funding outcomes are relatively predictable, so careers are not so capriciously disrupted.

The ARC system is burdened with excessive detail and clumsy procedures, it is highly inefficient, officious, patronising and capricious. It is not worthy of the high-quality science community it is supposed to serve.

These are generic criticisms of a system that largely decides who is to get funding by asking already established researchers to decide whether their ideas deserve support–let aone the issue of the ideological wars that are rife in social sciences, and the particular extreme of economics, where one paradigm (neoclassical economics) dominates all others. There of course I have personal experience.

I have put in about nine applications over the years–starting in 1997–to get the time I needed to develop my models of debt deflation. Each application has taken something close to two months to develop, given the time-consuming and capricious bureaucratic overload required by the scheme that Geoff Davies details so well–time that I could have spent doing the research, rather than applying for funding. Every last application failed, including one where I was the top-ranked researcher at my university out of the seven who made it to the final round–with an average score from the four referees of 88.75 (resulting from 3 very high scores and one dismissively low one of 75; I was lucky that year to get 3 non-neoclassical referees who understood my work).

The ARC’s over-riding committee revised my score–to 76. Though I topped UWS on the referees’ scores, I was the only one of the seven UWS researchers not to get funded. If there is any other explanation for this apart from bias against non-orthodox economics (or an “Old Boys Club” that is the real outcome of the superficially impartial evaluation process), I’d like to hear it.

Much against my better judgment, I was prevailed upon to apply again this year–when the debt-deflation that I wanted to research a decade before it began was already three years old. The funding results for this scheme have just been announced, and surprise surprise, I didn’t get funding.

I won’t be wasting my time again. After all, there’s research to be done…

About Steve Keen

I am Professor of Economics and Head of Economics, History and Politics at Kingston University London, and a long time critic of conventional economic thought. As well as attacking mainstream thought in Debunking Economics, I am also developing an alternative dynamic approach to economic modelling. The key issue I am tackling here is the prospect for a debt-deflation on the back of the enormous private debts accumulated globally, and our very low rate of inflation.
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139 Responses to Australian Research Funding

  1. peterjbolton says:

    @ Alex Pollard

    Great, very happy to hear that. Wal and I have been in contact now for perhaps 20 years or so and I will be visiting him again at Xmas with my daughter. Wal has opened the door to the future and it is through that door that all must pass. He and Faye are great, real people of compassion and humility yet the knowledge and its impact, greater than any nuclear device, is enormous.

    You will understand this image then

  2. al49er says:

    STEVE “I have a strong policy on this blog of civil exchanges, and what’s happening between John Prentice and Peter Bolton right now fails that policy. I will delete any further exchanges in this vein, and I’d like you both to take a break from my blog for a while. Rejoin when you have both calmed down”

    This demonstrates I have not been reading the detail enough of the postings. I looked back over 2 & 3 and couldn’t find the stoush between these two pugilists. What am I missing here?

    I thought only the ‘alarmists’ and ‘sceptics’ got in trouble for this sort of stuff. John & Peter will you put a bit of a ‘marker’ up on your posts when you are having a bit of a ‘biffo’.

    This site is tough reading at times and I find the ‘colour’
    helps. But everyone is agreed that ‘you are the boss Steve’ and I think the ‘slaps’ are taken pretty well.

    Tally Ho !

  3. ak says:


    No there were some personal and ethnic remarks which Steve deleted. I would have done the same.

    I have to admit that I strongly disagree with all the “new age”-like stuff (plasma interactions and all of that – why can’t we observe any electromagnetic waves (including x-rays) produced there?).

    If somebody cannot communicate his/her ideas in a clear manner using terms which can be understood easily (without the hidden context) and these ideas seem to be inconsistent with very basic observations – something is probably not right.

    Not everything which is a “whilostic alternative” has any real scientific value. I would say that the most of this stuff is just babbling but sometimes maybe a few interesting ideas can also be found there.

    But how does this relate to the economics? I would say that plasma (meta)physics has probably very little in common.

  4. Alan Gresley says:

    @ak 121

    “The neoliberals have managed to poison people with the austrerity agenda making further fiscal intervention impossible, especially if the Republicans win the elections.”

    How coincidental that QE2 is most likely going to happen just before America faces austerity.

    “But debt deleveraging will not be reversed by whatever size of QE they undertake (even if long term interest rates are zero people will not start borrowing again).”

    Precisely. Austerity will add extra de-leveraging forces. You know this, I know this, many others know this.

    Americans must be brainwashed to hold up banners demanding jobs if the only way for America to compete against China is by these ways.

    1. US Trade tariffs for consumer items produced at slave labor rates.
    2. Demands to China to double or triple the average wage in China.
    3. Americans to begin to work for slave labor rates.

  5. Alan Gresley says:

    @ak 128

    “Not everything which is a “whilostic alternative” has any real scientific value.”

    Are you meaning holistic?

    “I would say that the most of this stuff is just babbling but sometimes maybe a few interesting ideas can also be found there.”

    When did the “New Age” way of seeing things begin?

    “But how does this relate to the economics? I would say that plasma (meta)physics has probably very little in common.”

    Really. So me replying to you here doesn’t have some micro or macro affect on economics when economics happens in a world that is really just vibrating energy.

    Please think about that latest appliance that you have purchased with the made in China text on the box. Now ponder how that appliance has infinite potential before the bits of metal, plastic, etc that go into it to make (create) it are observed.

  6. Philip says:

    Good news, Dean Baker’s excellent book Plunder and Blunder: The Rise and Fall of the Bubble Economy is freely available on CEPR’s website:

  7. peterjbolton says:

    Vital to consider:
    Keyword: acceleration | non-linear | inept | “leadership” |

  8. Philip says:

    Updated version of the NYT interview with James Galbraith:

  9. TruthIsThereIsNoTruth says:

    “economics happens in a world that is really just vibrating energy.”

    As fascinating as it is, it is still an effective theory. In reality we don’t really know what is happening, because in reality there is no absolute reality. We cannot get away from our human perspective. Stephen Hawkings latest book, although slightly disappointing, makes this point very well.

    Understanding the world as vibrating energy is useful for making some predictions in the top end of physics. One day this may lead to some changes in economic reality, but for the time being it may be a little counter productive to reference all your realities on this basis. It may detract you from correct interpretation. If economics has anything to learn from physics it is the principle and acceptance of uncertainty, keeping in mind this is at best a metaphorical connection.

  10. Graham Turner says:

    Steve have you tried INET? it is based in the UK in Cambridge and backed by George Soros. Gillian Tett comments on its activities in this Saturday’s FT Magazine.
    He gave $50m and established the Institiute for New Economic Thinking whose aim is to “promote changes in economic theory and practice”
    Sounds right up your street.

  11. Steve Keen says:

    I haven’t Graham, but the list of successful applicants included some people whose work I respect (such as Leanne Ussher) so I’m tempted to try myself for the next round.

  12. The Prince says:

    Hi Steve, I referenced this article in a post I wrote on a possible solution on

    The Prince

  13. Steve Keen says:

    Thanks Prince,

    It’s a good concept–though I’d like to get the ARC out of the loop as completely as possible. Australians may be socialists at heart, but some of them are bureaucrats at heart as well. I’d like to see that side of the national character die a slow death.

  14. The Prince says:

    Well said Steve – its the great Australian paradox – we consider ourselves larrikins and anti-authoritarian, but we love to have rules, and committees to design those rules and endless discussions (usually over a beer) about those rules and etc ad nauseam.
    Chris aka The Prince

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