Piloting and Evaluating NSF Science Lottery Grants: A Roadmap to Improving Research Funding Efficiencies and Proposal Diversity

February 2nd 2022


The United States no longer leads the world in basic science. There is growing recognition of a gap in translational activities—the fruits of American research do not convert to economic benefits. As policymakers consider a slew of proposals that aim to restore American competitiveness with once-in-a-generation investments into the National Science Foundation (NSF), less discussion has been devoted to improving our research productivity—which has been declining for generations. Cross-agency data indicates that this is not the result of a decline in proposal merit, nor of a shift in proposer demographics, nor of an increase (beyond inflation) in the average requested funding per proposal, nor of an increase in the number of proposals per investigator in any one year. As the Senate’s U.S. Innovation and Competition Act (USICA) and House’s America COMPETES Act propose billions of dollars to the NSF for R&D activities, there is an opportunity to bolster research productivity but it will require exploring new, more efficient ways of funding research. 

The NSF’s rigorous merit review process has long been regarded as the gold standard for vetting and funding research. However, since its inception in the 1950s, emergent circumstances — such as the significant growth in overall population of principal investigators (PIs) — have introduced a slew of challenges and inefficiencies to the traditional peer-review grantmaking process: The tax on research productivity as PIs submit about 2.3 proposals for every award they receive and spend an average of 116 hours grant-writing per NSF proposal (i.e., “grantsmanship”), corresponding to a staggering loss of nearly 45% of researcher time; the orientation of grantsmanship towards incremental research with the highest likelihood of surviving highly-competitive, consensus-driven, and points-based review (versus riskier, novel, or investigator-driven research); rating bias against interdisciplinary research or previously unfunded researchers as well as reviewer fatigue. The result of such inefficiencies is unsettling: as fewer applicants are funded as a percentage of the increasing pool, some economic analysis suggests that the value of the science that researchers forgo for grantsmanship may exceed the value of the science that the funding program supports.

Our nation’s methods of supporting new ideas should evolve alongside our knowledge base. Science lotteries — when deployed as a complement to the traditional peer review grant process — could improve the systems’ overall efficiency-cost ratio by randomly selecting a small percentage of already-performed, high quality, yet unfunded grant proposals to extract value from. Tested with majority positive feedback from participants in New Zealand, Germany, and Switzerland, science lotteries would introduce an element of randomness that could unlock innovative, disruptive scholarship across underrepresented demographics and geographies. 

This paper proposes an experimental NSF pilot of science lotteries and the Appendix provides illustrative draft legislation text. In particular, House and Senate Science Committees should consider the addition of tight language in the U.S. Innovation and Competition Act (Senate) and the America COMPETES Act (House) that authorizes the use of “grant lotteries” across all NSF directorates, including the Directorate of Technology and Innovation. This language should carry the spirit of expanding the geography of innovation and evidence-based reviews that test what works. 

Challenge and Opportunity

A recent NSF report pegged the United States as behind China in key scientific metrics, including the overall number of papers published and patents awarded. The numbers are sobering but reflect the growing understanding that America must pick which frontiers of knowledge it seeks to lead. One of these fields should be the science of science — in other words not just what science & technology innovations we hope to pursue, but in discovering new, more efficient ways to pursue them. 

Since its inception in 1950, NSF has played a critical role in advancing the United States’ academic research enterprise, and strengthened our leadership in scientific research across the world. In particular, the NSF’s rigorous merit review process has been described as the gold standard for vetting and funding research. However, growing evidence indicates that, while praiseworthy, the peer review process has been stretched to its limits. In particular, the growing overall population of researchers has introduced a series of burdens on the system. 

One NSF report rated nearly 70% of proposals as equally meritorious, while only one-third received funding. With a surplus of competitive proposals, reviewing committees often face tough close calls. In fact, empirical evidence has found that award decisions change nearly a quarter of the time when re-reviewed by a new set of peer experts. In response, PIs spend upwards of 116 hours on each NSF proposal to conform to grant expectations and must submit an average of 2.3 proposals to receive an award — a process known as “grantsmanship” that survey data suggests occupies nearly 45% of top researchers’ time. Even worse, this grantsmanship is oriented towards writing proposals on incremental research topics (versus riskier, novel, or investigator-driven research) which has a higher likelihood of surviving a consensus-driven, points-based review. On the reviewer side, data supports a clear rating bias against interdisciplinary research or previously unfunded researchers PIs, while experts increasingly are declining invitations to review proposals in the interests of protecting their winnowing time (e.g., reviewer fatigue). 

These tradeoffs in the current system appear quite troubling and merit further investigation of alternative and complementary funding models. At least one economic analysis suggests that as fewer applicants are funded as a percentage of the increasing pool, the value of the science that researchers forgo because of grantsmanship often exceeds the value of the science that the funding program supports. In fact, despite dramatic increases in research effort, America has for generations been facing dramatic declines in research productivity. And empirical analysis suggests this is not necessarily the result of a decline in proposal merit, nor of a shift in proposer demographics, nor of an increase (beyond inflation) in the average requested funding per proposal, nor of an increase in the number of proposals per investigator in any one year. 

As the Senate’s U.S. Innovation and Competition Act (USICA) and House’s America COMPETES Act propose billions of dollars to the NSF for R&D activities, about 96% of which will be distributed via the peer review, meritocratic grant awards process, now is the time to apply the scientific method to ourselves in the experimentation of alternative and complementary mechanisms for funding scientific research. 

Science lotteries, an effort tested in New Zealand, Switzerland, and Germany, represent one innovation particularly suited to reduce the overall taxes on research productivity while uncovering new, worthwhile initiatives for funding that might otherwise slip through the cracks. In particular, modified science lotteries, as those proposed here, select a small percentage of well-qualified grant applications at random for funding. By only selecting from a pool of high-value projects, the lottery supports additional, quality research with minimal comparative costs to the researchers or reviewers. In a lottery, the value to the investigator of being admitted to the lottery scales directly with the number of awards available. 

These benefits translate to favorable survey data from PIs who have gone through science lottery processes. In New Zealand, for example, the majority of scientists supported a random allocation of 2% total research expenditures. Sunny Collings, chief executive of New Zealand’s Health Research Council, recounted

“Applications often have statistically indistinguishable scores, and there is a degree of randomness in peer review selection anyway. So why not formalize that and try to get the best of both approaches?”

By establishing conditions for entrance into the lottery — such as selecting for certain less funded or represented regions — NSF could also over-index for those applicants less prepared for “grantsmanship”.

What we propose, specifically, is a modified “second chance” lottery, whereby proposals that are deemed meritorious by the traditional peer-review process, yet are not selected for funding are entered into a lottery as a second stage in the funding process. This modified format ensures a high level of quality in the projects selected by the lottery to receive funding while still creating a randomized baseline to which the current system can be compared.

The use of science lotteries in the United States as a complement to the traditional peer-review process is likely to improve the overall system.  However, it is possible that selecting among well-qualified grants at random could introduce unexpected outcomes. Unfortunately, direct, empirical comparisons between the NSF’s peer review process and partial lotteries do not exist. Through a pilot, the NSF has the opportunity to evaluate to what extent the mechanism could supplement the NSF’s traditional merit review process. 

By formalizing a randomized selection process to use as a baseline for comparison, we may discover surprising things about the make up of and process that leads to successful or high-leverage research with reduced costs to researchers and reviewers. For instance, it may be the case that younger scholars who come from non-traditional backgrounds end up having as much or more success in terms of research outcomes through the lottery program as the typical NSF grant, but are selected at higher rates when compared to the traditional NSF grantmaking process. If this is the case, then there will be some evidence that something in the selection process is unfairly penalizing non-traditional candidates. 

Alternatively, we may discover that the average grant selected through the lottery is mostly indistinguishable from the average grant selected through the traditional meritorious selection, which would provide some evidence that existing administrative burdens to select candidates are too stringent. Or perhaps, we will discover that randomly selected winners, in fact, produce fewer noteworthy results than candidates selected through traditional means, which would be evidence that the existing process is providing tangible value in filtering funding proposals.

By providing a baseline for comparison, a lottery would offer an evidence-based means of assessing the efficacy of the current peer-review system. Any pilot program should therefore make full use of a menu of selection criteria to toggle outcomes, while also undergoing evaluations from internal and external, scientific communities. 

Plan of Action

Recommendation 1: Congress should direct the NSF to pilot experimental lotteries through America COMPETES and the U.S. Innovation and Competition Act, among other vehicles. 

In reconciling the differing House America COMPETES and Senate USICA, Congress should add language that authorizes a pilot program for “lotteries.” 

We recommend opting for signaling language and follow-on legislation that adds textual specificity. For example, in latest text of the COMPETES Act, the responsibilities of the Assistant Director of the Directorate for Science and Engineering Solutions could be amended to include “lotteries”: 

Sec. 1308(d)(4)(E). developing and testing diverse merit-review models and mechanisms, including lotteries, for selecting and providing awards for use-inspired and translational research and development at different scales, from individual investigator awards to large multi-institution collaborations;

Specifying language should then require the NSF to employ evidence-based evaluation criteria and grant it the flexibility to determine timeline of the lottery intake and award mechanisms, with broader goals of timeliness and supporting the equitable distribution among regional innovation contenders. 

The appendix contains one example structure of a science lottery in bill text (incorporated into the new NSF Directorate established by the Senate-passed United States Innovation and Competition Act), which includes the following key policy choices that Congress should consider: 

  • Limiting eligibility to meritorious proposals;
  • Ensuring that proposals are timely;
  • Limiting the grant proposal size to provide the maximum number of awards and create a large sample to fairly evaluate the success of a lottery program;
  • Rigorous stakeholder feedback mechanisms from the scientific research community; 
  • Fast-tracking award distribution following a lottery; and 
  • Regular reports to Congress in accordance with the NSF’s Open Science Policy to ensure transparency; accountability; and rigorous evaluation. 

Recommendation 2: Create a “Translational Science of Science” Program within the new NSF Technology, Innovation and Partnerships Directorate that pilots the use of lotteries with evidence-based testing: 

First, the NSF Office of Integrative Activities (OIA) should convene a workshop with relevant stakeholders including representatives from each directorate, the research community including NSF grant recipients, non-recipients, and SME’s on programmatic implementation from New Zealand, Germany, and Switzerland in order to temperature- and pressure-test key criteria for implementing piloted science lotteries across directorates. 

  • The initial goal of the workshop should be to gather feedback and gauge interest from the PI community on this topic. To this end, it would be wise to explore varying elements in science lottery construction to appreciate which are most supported from the PI community. The community, for example, should be involved in the development of baseline parameters for proposal quality and a timely, equitable process, despite varying directorate application deadlines. This might include applicants’ consented sign-off before entrance into the lottery, upfront and consistent communications of timelines, and randomization and selection from a pool with scores of at least [excellent/very good/good] during the peer evaluation process described in the NSF’s “Proposal and Award Policies and Procedures Guide”. 
  • Another goal of this workshop would be to scope the process of an OIA inter-directorate competition to submit applications in order to receive an award from the Division of Grants and Agreements to pursue pilot science lottery. The workshop should therefore develop a clear sense of opportunities with respect to budget sizing for each directorate and could consider making recommendations about the placement of science lottery pilots across directorates based on willingness to devote experimental resources. To maximize the number of lottery recipients, the proposal must not exceed 200% of the median grant proposal to a given directorate;
  • Finally, a third goal of the workshop should be to explore standards and timeframe for evidence-based evaluation mechanisms as described above and in the bill-text below, including stakeholder feedback mechanisms, regular reports to Congress, and transparency requirements. Additional mechanisms might include detailed reports on grants and awardees like demographic and geographic information of awardees, comparison of outcomes from traditional awardees and lottery awardees, and a statistical picture of the entire pool of grant proposals entered into the lottery. If the workshop is based on competitive directorate applications, the General Services Administration’s Office of Evaluation Sciences (OES) should be invited for later-stage workshop convenings to provide technical assistance in designing evaluation criteria. Some unifying criteria include meeting the requirements of the NSF’s Open Science Policy, Public Access Policy, and making grant information public as soon as feasible to facilitate rapid evaluation from external stakeholders — a potential metric to judge directorate applications. 

About the Authors

Ishan Sharma is a Fellow at the Federation of American Scientists and Policy Analyst at the Day One Project where he oversees the development, curation, technical assistance and implementation of key science and technology policies with a focus on foreign affairs, critical and emerging technologies, and lab-to-market innovation. He directed the FAS Special Project on Emerging Technologies and International Security, which devised cohesive domestic and foreign policy recommendations to counter the emergence of digital authoritarianism. His work has been featured in BBC, the UN Special Rapporteur on Freedom of Religion or Belief, Lawfare’s Cyberlaw Podcast, and at TEDx. Ishan sits on the board of two nonprofits that aim to empower youth through mentorship and media literacy, and is one of 24 Senior John Lewis Fellows investigating the future of democracy, oppression, and human rights in the 21st century. He holds a B.S. from Cornell University and has studied jurisprudence and international human rights law at the University of Oxford. 

Caleb Watney is the co-founder and co-CEO of the Institute for Progress. Previously, Caleb was the director of innovation policy at the Progressive Policy Institute where his work focused on the policy levers the US could use to increase long-term rates of innovation, including high-skill immigration, basic science funding, R&D incentives, and the development of emerging technologies like artificial intelligence. Before PPI, Caleb worked as a technology policy fellow at the R Street Institute and as a graduate research fellow at the Mercatus Center. His commentary has been published in The Atlantic, Politico, the Wall Street Journal, Lawfare, and the National Review. He has also been cited in the New York Times, Vox, Ars Technica, and the National Journal. He received his master’s in economics from George Mason University and a bachelor of business administration from Sterling College.

Dan Correa is CEO of the Federation of American Scientists. In 2019, Dan founded the Day One Project at FAS. Prior to joining FAS, Correa led the Technology and Public Policy Project at Stanford’s Freeman Spogli Institute, an initiative to enlist leading technical and policy experts to develop actionable policy proposals across a range of cutting-edge international and domestic science and technology issues. In 2017, he founded the Federal Innovation Council as an initiative of the Partnership for Public Service, and built it into a platform for senior government officials to forge a more innovative, effective, technologically-driven government. He previously helped shape science and technology policy for the Obama Administration for four years, serving as Assistant Director for Innovation Policy at the White House Office of Science and Technology Policy. Prior to joining the White House, Correa was the first employee at the Information Technology and Innovation Foundation, a Washington, D.C. think tank, where he led development of technology, entrepreneurship, and innovation policy. He has held the position of Kauffman Fellow in Law, Economics and Entrepreneurship at Yale Law School. Correa is also a veteran of several political campaigns, including President Barack Obama’s 2008 campaign, where he served as Deputy Florida Get Out the Vote Director. He received a law degree from Yale Law School, a master’s degree in economics from Yale University, and a bachelor’s degree from Dartmouth College.

M. Anthony Mills is a senior fellow at the American Enterprise Institute, where he studies the federal government’s role in science and innovation and the relationship between scientific expertise and our governing institutions. Before joining AEI, Mills was a resident senior fellow at the R Street Institute, where he launched and led a program on science policy and also served as associate vice president for policy. Previously, he was managing editor of RealClear Media Group and editor of RealClearPolicy. He has worked for numerous publications, including The New Atlantis, Big Questions Online, and several academic publications, and has held positions at Williams & Jensen, the Manhattan Institute, and the US Chamber of Commerce Foundation. His writings have appeared in such publications as Politico, Slate, RealClearPolitics, The Hill, National Review, National Affairs, City Journal, Issues in Science and Technology, The New Atlantis, and various peer-reviewed journals. He holds a PhD and an MA in philosophy from the University of Notre Dame and a BA in philosophy, French, and comparative literature from Northwestern University, where he also completed an MA in French.

Note: The American Enterprise Institute for Public Policy Research is a nonpartisan, nonprofit 501(c)(3) educational organization. The views expressed in this statement are those of the author. AEI does not take institutional positions on any issues. 

The contributors would like to give special thanks to Arnab Datta, and Alec Stapp, Institute for Progress, and Erica Goldman, Federation of American Scientists for their thoughtful commentary and feedback.