State, Federal Support for Research

Carlos Henrique de Brito Cruz - Estadão, 05/02/2012

*The original article published in Portuguese can be found here

Nearly one-third of Brazil’s public-sector investment in research and development comes from its state governments. At a time when we are contending with cutbacks in federal funds for R&D, it seems appropriate to highlight a few relevant facts about the little-noticed but essential contribution that states make to the country’s scientific and technological development.

According to the Ministry of Science, Technology and Innovation (MCTI), 2010 public-sector expenditure on R&D in Brazil totaled R$23 billion. Of that amount, R$7 billion came from state coffers. Across states, however, the distribution of effort on R&D varies significantly. Sao Paulo’s expenditure alone (R$5 billion) accounts for 72% of the total, followed by Rio de Janeiro with R$489 million and Parana with R$414 million. Next in the ranking are Minas Gerais (R$214 million), Santa Catarina (R$210 million) and Bahia (R$120 million). The remaining 20 states and the Federal District devoted a combined R$541 million to R&D in 2010.

The MCTI divides state R&D expenditure into two types. State monies going to state research foundations (FAPs) and institutes represent 36% of the outlays. The remaining 64% are R&D expenditures for state universities and institutions of higher education, not including funding for pensions, court decisions and other non-research activities.

There has been a real deconcentration of expenditure on FAPs and institutes. In 2001 Sao Paulo accounted for 61% of all such outlays and, even with a constant increase in funding for the Sao Paulo Research Foundation (FAPESP), its share of the total in 2010 had fallen to 45%. Two factors contributed to this change. Improved state finances in the context of economic growth facilitated a natural emulation of the FAPESP model, and the MCTI took action to require a state counterpart in certain science and technology investment programs.

An excellent example of what collaboration can achieve is the National Institutes of Sciences and Technology (INCTs) program, which receives strong support from state foundations and federal agencies. The INCTs’ second largest source of funds is FAPESP, after the National Fund for Scientific and Technological Development (FNDCT). The result is a victory for Brazil, in the form of greater regional capillarity and scope of high-level research. FINEP’s Pappe Subvenção grants program is doing the same thing, through its support for R&D at small businesses in collaboration with state FAPs.

There is still a gap in priorities between the states with regard to their spending on research in universities, with Sao Paulo accounting for 86% of the national expenditure. The failure of deconcentration stems from the substitutive nature of federal policy, under which investment is independent from, rather than articulated with, state efforts. The federal government rewards the states that expend the least effort on research in higher education by making the outlays for them, thereby reducing the efficiency of federal investment.

Much remains to be done in order to arrive at a situation in which science and technology is less concentrated in Sao Paulo, where the state’s effort is decisive. The data show that this is not an issue of differences in wealth, but rather in priorities. The state of Sao Paulo spends 23 times as much as Minas Gerais on R&D, yet its GDP is only 3.6 times as large. Although its research expenditure is 11 times that of RJ’s, its GDP is only three times greater. The low priority that most states place on R&D mirrors their expectation for an offset through greater federal support.

The potential for higher state expenditure on R&D is considerable. Sao Paulo contributes one-third of Brazil’s GDP and spends R$5 billion on R&D. If the other states were to apply that same percentage, we would be looking at R$10 billion. Since the other states devoted R$2 billion to R&D in 2010, there is an additional potential of R$8 billion. If one-fourth of that potential (R$2 billion) were to be achieved through appropriate policies, this would amount to more than the federal cutback in the MCTI’s 2012budget.

Complementarity of effort is an old concept and the opposite of substitution. In the U.S., the Morrill Act of 1862 granted federal lands to states that assumed the responsibility for maintaining and developing higher education at what came to be known as land-grant colleges. As a result of that legislation, over 70 U.S. institutions of higher education were created, including the University of California, the University of Illinois, Rutgers, Cornell, and Purdue, to name just a few.

The magnitude of Brazil’s challenges in this area requires collaborative effort between the spheres of government. It is not simply a matter of increasing the national—not just federal—expenditure on R&D. It will require, in particular, the creation of more institutions devoted to higher learning and research, with more researchers. Per million inhabitants, Brazil has one-fourth the number of researchers compared to Spain, and one-eighth the number in South Korea.

Federal-state collaboration could be the winning ticket for obtaining more researchers. Managed by the states under an autonomous system, as is the current practice in Sao Paulo, the new collaboratively-financed universities could be tailored to local needs without being hampered by the constraints of federal government red tape. This has already been done in the health sector with the SUS and in basic education with FUNDEF, where federal and local (state, municipal, and even private) financing were combined to achieve public-interest objectives. With the states, the Ministry of Education could also put together a national (rather than federal) plan to develop ten Brazilian universities—state, federal, or private—into institutions that rank among the hundred best in the world in ten years.

The entire country would benefit if the federal government would assume its national responsibility in higher education. So far, it has acted federally rather than nationally. Collaboration with state governments could offer more and better results, thereby creating opportunities for more young people while developing science and technology in Brazil.

Translated by Doris M. Schraft, on behalf of the Brazil Institute, Woodrow Wilson International Center for Scholars