You Work for Us Now: Concentration in University-Performed Defense R&D

Chandler S. Reilly

Defence and Peace Economics, 2025, vol. 36, issue 5, 761-788

Abstract: Concentration in university research funded by the Department of Defense (DOD) has been rising in recent years, deviating from the steady levels of concentration in other federally-funded university research. The purpose of this paper is to explain that rise in concentration. When the DOD funds defense-specific R&D projects, there are two priorities affecting bureaucratic incentives: 1) Coordination incentivizes steering research toward specific technological ends, and 2) Security incentivizes actively limiting risks of information leakage. Sole source research center contracts make the necessary coordination and monitoring easier to achieve. As demand for projects that require more coordination and security increases, spending is allocated to sole source research centers leading to increasing concentration. Spending on military research projects awarded to universities such as aircrafts rapidly increased from 2008 to 2020 with much of that spending accruing to DOD-sponsored university research centers. Over that period, the share of obligations awarded to the 16 universities that manage DOD research centers rose from 37 percent in 2008 to 59 percent in 2020. This paper contributes to our understanding of the conditions under which policy makers choose to deviate from using grants to fund early-stage research and concentrate funding in a select group of performers.

Date: 2025
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DOI: 10.1080/10242694.2024.2394762

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