Crowding out and resulting trends in research fund allocation in New Zealand, 1991–2000

From 1991 ‐ 1999, the New Zealand Government allocated public R&D funds via a pool system ‐ called the public good research fund ‐ through which research providers (universities, research institutes etc) bid for funding on a project by project basis. This system was in part to counteract a previous tendency for public funding to crowd outprivate investment. The funding administrators were enjoined to take account of the private appropriability of the projects submitted and direct public funds to complementary projects or projects which would otherwise be under‐funded. This paper finds evidence of increased private sector participation in research funding, and a declining share going to research provision over the last 9 years. The Crown Research Institutes appear to be the main beneficiaries.