Roger's Reality Check: Polarization, Backlashes and Mistakes

Don't expect research organizations to change the way they do business because California is giving away $300 million a year for stem cell research.

Get used to the outcry from opponents of stem cell research even if they have no likelihood of success. They are going to be with us for a long time.

Don't expect CIRM to create a host of friends with its billion-dollar beneficence. A backlash could easily surface.

Just a few of the thoughts from Roger Noll, a public policy professor at Stanford University who also teaches in the business and economics departments.

Noll, co-author of "The Technology Pork Barrel," wrote a 44-page paper in June on "The Politics and Economics of Implementing State-Sponsored Embryonic Stem-Cell Research" for the Stanford Institute for Economic Policy Research.

The paper provides a good overview of the sticky intellectual property rights issues involving stem cell research generally, as we wrote about July 17. Noll also spoke directly to events in this state. Here are some highlights from his paper.

"As the California experience reveals, setting up a functioning research program is not easy. Establishing an effective state program requires overcoming substantial political and organizational problems. While spending a great deal of money is easy, spending money effectively without causing a political backlash is difficult. Moreover, opponents of (stem cell) research do not go quietly in the night once legislation establishes a program. Instead, they continue to use all means at their disposal – litigation, political participation, and public demonstrations – to stymie implementation of the program."

"Moreover, when programs are thrust upon a state through a ballot initiative, as occurred in California in 2004, unprepared state officials are likely to find themselves tasked to deal with these problems on a fast time schedule, further increasing the probability of a serious mistake in program implementation."

One unusual feature of stem cell policy is its politics, which is characterized by "intense polarization." Noll wrote that on one side "a relatively large number of people...place high priority on all forms of research that (hold) promise of creating effective new treatments." They wind up "pitted against a smaller but still large number of people who accord equally high salience to adopting policies that would prohibit this research."

"Intense polarization of this form means that battles are never won because losers will not accept defeat."

Noll predicted that political polarization "is likely to create significant uncertainty and delay, and thereby vastly increase the implementation costs of the program."

The economist also wrote, "Politics will tend to favor...commercially interesting projects at the expense of more fundamental, long-term projects with much larger expected future payoffs."

And he said, "The licensing income derived from stem-cell research is likely to be a small fraction – less than five percent – of the costs of that research, and is likely not to be substantial for many years."

Finally, Noll pointed out that "Stanford University receives as much revenues in a year as CIRM is likely to spend on external grants over a decade. The lesson here is that CIRM can not expect to have much leverage over either Stanford or the entities that support it. Any attempt to change the way that research organizations do business with an annual expenditure of $300 million is doomed to failure."