“Encouragements” of the Academy of Sciences, 1831-1850.
The first recorded grant system was administered by the Paris Academy of Sciences following a large estate gift from Baron de Montyon. Finding itself constrained in its ability to fund the research of promising but unestablished scholars, the academy took advantage of the flexibility offered by the Montyon donation to transform the traditional grand prizes into “incentives”: more modest amounts that could broaden the range of researchers’ assets. Although the process was very informal (the names of the first recipients were not published in the academy journal Reports), it apparently avoided suspected or proven cases of corruption…Throughout the 19th century, however, the academy struggled to convince wealthy donors to abandon their preference for large indivisible monetary prizes in favor of such encouragement divisible.
This is excerpted from Pierre Azoulay and Danielle Li’s essay “Scientific Grant Funding”, in the new and very useful volume of the NBER Innovation and public policy, edited by Austan Goolsbee and Benjamin F. Jones. (But according to the book’s own theories, shouldn’t the book be cheaper than that?)