ABSTRACT
The first flaw is that there is no way, even in theory, to determine the marginal social return either from a given piece of research or from all research in the aggregate. Moreover, there is no way, even in theory, to determine the social return from the investments that will be foregone if the government increases its funding of research. The Department of Energy announced, in 1980, a National Passive and Hybrid Solar Energy Program in intensive research, development and market penetration. Nelson and Langlois discuss the problems of government support for commercial R&D and conclude that there are important requirements to be met if the support is to be successful. First, the industry to be helped must see the need for the research and help guide it. Second, the researchers involved must be interested in the purely scientific disciplines underlying the technology; otherwise the research becomes scientifically sterile.
