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The problem is that it leads to biased science. Large bureaucratic agencies tend to converge on the "right approach" prematurely, and then not fund anyone who disagrees with the approach. Look at the recent history of nutrition in the USA for a (not too politically charged) example of this happening. Ideal no one source should dominate science funding.

True. But my impression is that since the Cold War ended there has not been much competition between different countries anyways. It may also be possible for countries to make a joint effort while simultaneously increasing the level of competition. For example, instead of letting one or multiple bureaucratic agencies direct the research, set a joint fund that would distribute large financial prizes for solving major problems.
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