Keywords: peer review, data envelopment analysis, DEA, R&, D subsidies, project selection mechanisms, research and development, public subsidies, R&, D investment, R&, D projects
Assessing the assignation of public subsidies: do the experts choose the most efficient R&D projects?
The implementation of public programmes to support business research and development (R&D) projects requires the establishment of a selection process. This selection process faces various difficulties, which include the measurement of the impact of the R&D projects as well as selection process optimisation among projects with multiple, and sometimes incomparable, performance indicators. To this end, public agencies generally use the peer review method, which, while presenting some advantages, also demonstrates significant drawbacks. Private firms, on the other hand, tend toward more quantitative methods, such as data envelopment analysis (DEA), in their pursuit of R&D investment optimisation. In this paper, the performance of a public agency peer review method of project selection is compared with an alternative DEA method, with the objective to show some shortcomings of current procedures of ex–ante and ex–post evaluation of R&D subsidies.