No moral hazard - grant applicants are repeat players – that creates accountability because they have to apply for future grants

The most important reporting of grant progress comes not in response to the current grant but in applying for the next grant. Grants terms are measured in years; researcher careers are measured in decades (or, at least, most researchers hope so). Failure to get subsequent grants can result in the downsizing of a lab or the end of a career, making researchers repeat players. 180 As Gallini and Scotchmer noted, the "moral hazard" of non-contingent ex ante funding for a single grant "is overcome because future grants are contingent on previous success." 181 They argue that in practice, grants "operate much like prizes, with the wrinkle that a researcher must convince the sponsor in advance that his output might be worthy of a prize. For this purpose, his reputation might suffice, and in some cases, much of the research has already been completed." 182