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No state money for stem cells

SENATE PRESIDENT Robert E. Travaglini recently proposed that Massachusetts spend $100 million to support embryonic stem cell research. This follows his introduction of a bill that explicitly legalizes such research in the Commonwealth. The legalization bill makes perfect sense; it ensures that everyone knows the rules regarding stem cell research. The spending bill, however, is bad policy.

The argument for this spending is that it will encourage stem cell research in Massachusetts. Any such impact is likely to be small, however, given the multiple other sources of funding. Stem cell research promises marketable therapeutic advances, so profit-making companies have ample incentive to invest. Universities and nonprofit research foundations also provide generous funding for this research, including the basic science questions that for-profit companies sometimes avoid.

Whatever the funding source, it will follow the top researchers and the good ideas. The critical determinants of where this research occurs, therefore, are the location of elite universities and the availability of skilled labor; Massachusetts has both in abundance. Government funding will thus be a windfall to companies or universities that would have conducted stem cell research in Massachusetts anyway.

Beyond having limited impact, moreover, government funding will make the regulatory climate for stem cell research worse rather than better, thereby outweighing any benefit of increased funding.

The reason is that many people object to stem cell research on moral or religious grounds. If this view emanated from a tiny fraction of the population or was patently illogical, it might make sense to ignore it. But that is not the case. Even while accepting that stem cell research could eventually save lives, many people find the activity troubling. Advocates of stem cell research can argue, with reason, that these concerns are misplaced or distorted. But they cannot deny that opponents of stem cell research have good intentions.

A reasonable compromise between opponents and proponents, therefore, is for government to place no restrictions on privately funded research while abstaining from funding this research.

This approach means research can proceed with private funding, unencumbered by government regulation. The evidence shows the private sector generates enormous funding for stem cell research, with impressive results. A research team at Harvard University, for example, has recently produced 17 new stem cell lines using funding only from private sources.

By leaving stem cell research to the private sector, policymakers avoid forcing taxpayers to support research they find morally troubling. This also makes it harder for government to impose unwarranted restrictions. Profit making companies, universities, and research foundations that want to produce or fund stem cell research have strong incentives to lobby against regulation of private research activity.

If stem cell research occurs with government funding or in a government owned and operated institute, however, opponents gain leverage to restrict this research. Such regulatory excess will drive stem cell research out of Massachusetts far faster than government funding can bring it in.

The first Travaglini bill addresses the regulatory issues by explicitly legalizing stem cell research in the Commonwealth. Government Romney opposes this bill, and various groups have launched campaigns against Travaglini. The indications are, however, that the Legislature can override any veto from the governor. In that case, a favorable regulatory climate will induce stem cell research to locate in Massachusetts, without the polarizing influence of government funding.

The federal experience with stem cell research illustrates the dangers of government funding for controversial ideas. The polarization caused by this funding leads not just to withdrawal of support, which the private sector can generally replace; the resulting debate can create more restrictions than would otherwise occur. President Bush's 2001 decision to limit the use of federal funds generated enormous attention and precipitated myriad bills that would have banned certain kinds of stem cell research.

Fortunately, none of these bills has passed so far. But had there been no government funding, the debate might never have arisen in the first place. Massachusetts should not repeat the federal government's mistakes. Clarify the rules, and leave funding of stem cell research to the private sector.

Jeffrey A. Miron is a visiting professor of economics at Harvard University

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