In the early nineties, a huge debate raged in the US for several years about the desirability of funding mega-science projects such as the superconducting supercollider (SSC). The alternative vision proposed by the opponents of SSC (whose cost was originally pegged at $4 billion, but ballooned later to an estimated $12 billion) was "small science" -- a lot of projects, each costing small amounts of money. The debate went on until the government pulled the plug on the SSC -- the quintessential "big science" project.
Here's a similar question: should funding for academic research be made to individuals (or small groups of individuals), or should a block grant be made to departments (or, gulp, to institutions)? Many of us seem to -- rather intuitively -- vote for funding individuals. But why? What arguments would you give?
On the other hand, you might recall a certain institution -- whose name shall not be mentioned here! -- was lavished with a huge grant two budgets ago. What would be the arguments for such institutional grants? In other words, what are the factors that might tip the balance in their favour?
Evidently, these are the extremes along a continuum of options. I'm just trying to get a sense of the factors that should be considered before making a choice.
[A quick aside: There is some support for funding individuals in this Inside HigherEd story on funding made by US based organizations such as the Ford Foundation to researchers in post-Soviet Union Russia. Be careful though; because US funds seem to have aimed not just at academic research, but also at "large scale societal changes"].