Where does the National Bureau of Economic Research get its money?

Annoyed by the fact that the Cambridge, MA based National Bureau of Economic Research (NBER) charges $5 a pop (or requires an institutional subscription) to download its working papers (with some exceptions, such as for journalists, I decided to look into where they (and the people who publish there) get their funding, since I object to publicly funded research being published in venues that are expensive for the public to get access to.   Probably this is well-known to professsional economists (so if any read this thing, feel free to comment)---but the overall situation with NBER working papers seems to be that they are (primarily? entirely?) results of research done as part of NBER programs.  Perhaps that means, the research is NBER-funded as well?  NBER has a contract with the Commerce Department to officially determine when recessions and "stagnations" have begun, and ended.  I found it relatively difficult to figure out where NBER gets its money, since googling "NBER funding", "NBER budget" and the like tends to turn up NBER research on national budgets and general economics, not surprisingly.  I found this link to a page by an organization called SourceWatch interesting, though I don't have a lot of familiarity with the group.  Much of the discussion seems to concern pre-2001 funding, and the introductory paragraphs are confusing.  They consist mostly of quoted material, and it is unclear what is being quoted:  a New York Times article about the NBER or, as seems more likely, an article from an unnamed source, critical of the NYT piece and of the NBER's then-director Martin Feldstein?  In any case, the quoted material seems highly polemical even to someone as leftish on many things as I am.   And sure, Feldstein is too conservative for my taste, but he gets a lot of respect from me for recognizing, at least sometimes, that Keynesian theory can be relevant, and calling for substantial fiscal stimulus on Keynesian grounds early in this recession.  Nevertheless, this claim from SourceWatch is interesting:

"Between 1985 and 2001, the organization received $9,963,301 in 73 grants from only four foundations:

All four of these are characterized (by SourceWatch, at least, in their own descriptions linked in the above quote) as very conservative, small-government/low-regulation foundations.  Actually they say the  Scaife foundation is no longer pushing this ideology since Sarah Mellon Scaife took over, but (I think) during the 1985-2001 period they were.  I wouldn't necessarily trust SourceWatch on this (e.g. they say the Olin Foundation gave $20.5 million to "right-wing think tanks" in 2001, then give a list that includes the Brookings Institution.   I'm fairly confident this is not a mistake, rather a combination of deadpan humor and a genuinely left-wing viewpoint that does see Brookings as part of the right-wing liberal establishment.  But Olin is well known as a conservative foundation, so the characterization of Olin, if not of Brookings, seems reasonable.

I'm still at a loss about the pay-for-working papers policy.  Perhaps this --- especially library subscriptions to it --- is a significant source of income to the NBER?   NBER's working papers are definitely a respected and prestigious series that I see cited a lot (and not just by conservatives--Paul Krugman's blog links them on occasion, as does Brad DeLong's). So they can likely get a significant amount of income that way.  It does seem that the goal of spreading knowledge of the results of NBER (oops, I mean covert promotion of right-wing economic ideology ;-)) might be better served by making them free to the public.

Here's Freakonomics on the NBER and the shift in directorship from Feldstein to Jim Poterba.  (No opinion implied on the quality of Freakonomics books, blogs, or Steven Levitt, though.)  Still, it gives you an idea of the attitude of much of the economics profession toward the NBER.

4 thoughts on “Where does the National Bureau of Economic Research get its money?

  1. Hi Dave---

    I figure as a not-for-profit corporation, they probably have to file a publicly available financial report, which I was planning to look for. This looks like the summary page from that---there are probably more details in a full report though I'm not sure if they have to disclose funding sources by name. One thing that's clear from the income (i.e. "activities") part of the statement, is that current grant income is far and away their biggest source, at 32.4 million, with investment and interest big at around 5 million (presumably mostly from an endowment) and revenue from publications a distant third though non-negligible at around 1.5. (This isn't necessarily mostly from working papers subscriptions, though, as they actually publish things through University of Chicago press and may make money that way.) Thanks for the info and I'll try to track down the full report and see where the grants come from. Besides being specifically interested in the NBER, I'm a bit curious to see what the financial report of a nonprofit looks like.

  2. Hi again Dave and whoever's out there--- an update:

    While you can get the summary financials Dave linked to by going to "About Us" on the menu "About" at NBER's homepage (and following a link at the bottom), the full annual report isn't there. They are incorporated in New York, and I wasn't able to find a free database of New York nonprofit annual reports. More effort might well turn up a commercial database with limited free access...

    If they are getting 32.4 million./yr currently from grants, I suspect this means the 10 million or so sourcewatch cites "from just 4 foundations" over 16 years is not be a rounded picture of their grantors. They must have geen getting on the order of 30 million in 2001 alone. I'll look into this further.

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