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Empirically I don't think we see that states don't fund basic science because of freeriding concerns.

The states do fund science but since their main motive appears to be national prestige, they may be investing significantly less resources in it.






The states do fund science but since their main motive appears to be national prestige
Where did you get that idea? It sounds to me like an ivory tower explanation instead of studying the actual debate about changing science funding levels.
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ChristianKl
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