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Does a shift from hard to soft funding have an impact on research outcomes? Existing literature suggests that moving from hard money, such as lump-sum government-funded research, to commissioned research entails a greater risk of the researchers being influenced by the principal (the funding body). Based on literature and an empirical study, we identify two types of researcher roles: the influential consultant and the technical realist. The first type studies more advanced, important, and diffuse topics on behalf of principals high up in the hierarchy. They have a much greater experience of the issues discussed in this paper than the technical consultants. During the course of this study, we also discovered that the balance of power is not necessarily as one-sided as theory suggests: researchers can wield significant influence over the principals as well.

William Baumol's model predicts a steady increase in relative public sector prices (or costs) because of the combination of slow productivity growth and wage growth similar to sectors wherein productivity is growing more quickly. In this paper, we extend the Baumol model with political variables and analyze price growth in defense and public administration using Norwegian data. We find strong support for the mechanism of the Baumol model since manufacturing productivity is the most important determinant of relative public-sector prices. Greater political fragmentation has also contributed to the price growth, but its quantitative effect is smaller than that of manufacturing productivity. An analysis of a labor-intensive private service (restaurants and cafes) supports the broader relevance of the Baumol mechanism and the validity of the estimated effect of political fragmentation on the two sectors considered herein.

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