Incentivizes corruption—political cronyism
Spulber 14 (Daniel F. Spulber has a PhD in economics from Northwestern University and previously ranked 6th among economics in the United States, “Prices versus Prizes: Patents, Public Policy, and the Market for Inventions,” “Northwestern University School of Law: Law and Economics Series • NO. 14-15,” URL: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2488095, August 28, 2014)//NTG
Prize advocates assume that central planners would be able to achieve greater allocative efficiency than competitive markets for inventions and innovation. Governments are likely to provide rewards to cronies of politicians, lobbyists, political donors, or ideological allies. A government prize system would encourage rent seeking to obtain prizes, diverting resources away from invention and innovation and toward political influence. Government agencies also are likely to pursue objectives other than allocative efficiency, such as subsidies for groups of voters, increases in employment, income redistribution, regional economic growth, industrial policy, and support for political causes.