SHOULD DEVELOPING COUNTRIES PUBLICLY SUPPORT BASIC RESEARCH?

Keith PAVITT (SPRU, University of Sussex)

The orthodox economic case for the public support of basic research, first developed in the USA in the 1950s, rests on the assumption that its economically useful output is codified information that is costly to produce and (almost) costless to reproduce. In an interdepenent world this assumption suggests that public support for basic research should be given low priority in small and developing countries. If, on the other hand, the main output is assumed to a body of trained problem-solvers, the policy implications are very different. Evidence suggests that the latter assumption is closer to the truth.