Social Contracts and the Impact of Matching Fund Requirements on American Research Universities

Matching fund and cost-sharing requirements are increasingly pervasive elements in federal support of academic research. Federal agencies perceive universities as receiving benefits in the form of increased reputation and intellectual property rights from the performance of federally funded research. Distributed benefits are seen as justifying distributed costs. This trend challenges the public goods rationale for federal support of academic research. Reinforcing this trend are the increases in the number of research-intensive universities that induce agencies to seek what are, in effect, price discounts and induce universities to voluntarily offer them. The responses of universities to this new bargaining environment and public policy issues are examined.