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I would say the NIH is a better example than Veterans Affairs. The NIH reviewers for grant monies are actually scientists/epidemiologists/biostatisticians who are working in the field and who agree to be part of the study sections to review grant applications and score them. The highest scores get the grant money. They don't review applications from their own institutions and are never really sure how high a score needs to be to get the money. In recent years, funding has decreased so scores have had to be really high to get funding. It's a pretty good system though.
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