Publication Date

January 2002

Publication Details

Levy, A, Equality, Infancy and Efficiency in Allocating Internal Research Funds to Faculty Members, Working Paper 02-15, Department of Economics, University of Wollongong, 2002.


This policy paper deals with the annual allocation of faculty funds to academic staff members for supporting research related activities such as conference attendance, subscription to journals, submission of papers to refereed journals charging fees, purchase of software, etc. Equal allocation is a computationally convenient scheme and is also likely to be supported by a blocking coalition of faculty members when research performance is unequally nonsymmetrically distributed with a mode and a median that are significantly smaller than the mean. Unsurprisingly, equal allocation is frequently applied in allocating internal funds among faculty members for supporting the aforementioned research related activities. However, equal allocation presents no consideration for efficiency and does not provide desirable signals to faculty members. (See also Levy, 1993.) When the budget is small, it insufficiently rewards devoted, productive researchers and excessively rewards non devoted, or unsuccessful, faculty members. Based on the principles of: Equality - a lump-sum portion and open access, Infancy - support for new starters, and Efficiency - research output’s quality, quantity and share (abbreviated EIE) an EIE research-fund-allocation scheme is constructed and proposed in the following sections. Section II presents the EIE allocation scheme. Section III incorporates a fix degree of inequality aversion into the EIE allocation scheme. Section IV proposes a formula for computing members’ research output scores that takes into account quality, quantity and contribution aspects. Section V recommends.