At the NIH, at least, I know that enormous effort is put into ensuring that there are not conflicts of interest between the reviewers and those being reviewed.
I'm not particularly surprised to hear that some places do not put in that effort - it is a slow, painstaking process - but there are places where this is less of a problem.
I am in Australia where the pool of potential grant reviewers is pretty small for most areas. When you have a grant success rate of 15% it is all too easy to nobble your competitors via the review process.
For exactly the same reasons it is everywhere in the world: because there isn't enough funding to go around - and the grant application process is explicitly designed to be competitive.
It doesn't seem to be everywhere though. I know in the US, research is often collaborative and a single grant may fund many researchers. Those researchers do not seem to be competing internally for funding (though, I have seen conflict as to whose name should appear first on a publication!). I presume the same is likely true in Australia. Why is some research able to be collaborative while other must (apparently) be competitive?
Note also that collaborations compete with other collaborations for program grants, and R01s (the measure of a "real" PI) are inherently not collaborative. They are by their very nature competitive. And they are the metric by which principal investigators are judged.
Right, but students are written into the grant. Ultimately, nobody gives a shit which post doc or student you put on a project; the assumption (often flawed) is that they're all the same as far as the modular budget is concerned.
If they were special, the reasoning goes, they'd have their own F32 or T32 to work on the project.
It is a competitive everywhere, just in Australia you are playing in a much smaller pool. There just is not enough money to fund all good grant applications.
I'm not particularly surprised to hear that some places do not put in that effort - it is a slow, painstaking process - but there are places where this is less of a problem.