A Narrative Analysis of Federal Appropriations for Research and Development

Abstract: This paper provides a narrative analysis of postwar federal appropriations for the research and development (R&D) activities of the Department of Defense, Department of Energy, National Aeronautics and Space Administration, National Institutes of Health and National Science Foundation—five agencies that consistently account for the vast majority of federal outlays for all types of R&D. We build a novel dataset quantifying the enacted full-year appropriations for all budgetary accounts funding R&D activities at these five agencies over fiscal years 1947-2019. We use this dataset to isolate a subset of 218 “significant” changes in real appropriations for each agency, and we analyze numerous primary and secondary sources to understand the context and motivation. Based on these sources, we classify each significant change in federal R&D appropriations as either “endogenous” or “exogenous” to short-run macroeconomic developments. The exogenous changes in R&D appropriations are intended as instrumental variables for studying the causal effects of government R&D in appropriately specified empirical models.

DOI: https://doi.org/10.24149/wp2316

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