@techreport{NBERw2745,
 title = "Government Subsidies to Private Military R&D Investment:  DOD's IR&D    Policy",
 author = "Frank R. Lichtenberg",
 institution = "National Bureau of Economic Research",
 type = "Working Paper",
 series = "Working Paper Series",
 number = "2745",
 year = "1990",
 month = "June",
 URL = "http://www.nber.org/papers/w2745",
 abstract = {A relatively obscure defense procurement policy establishes a large subsidy to private military R&D investment. On the surface, it appears that the marginal subsidy to such investment is zero, but this is only true in the short run. Due to DOD's policy of allowable-cost determination, the long-run subsidy is substantial. It is much larger, in fact, than the subsidy provided by the R&D Tax Credit enacted in 1981. I calculate the subsidy by estimating an econometric model using contractor-level data from the Defense Contract Audit Agency. This subsidy may have an important influence on the amount and character of privately financed innovation in the U.S.},
}