Funding of scientific research is one of those questions where almost everyone agrees there's a problem. I have this impression that research funding processes are often an obstacle, either by making the wrong decisions, or by adding too much friction by the process of decision making. That's not a reflection so much on the people making the decisions.
In theory, yes, if the decision makers were perfect, then the current system would be close to perfect too. But perfection is an unreasonable standard, and the better question is whether the decision makers are the best available.. and in that case I have a reasonable amount of confidence that we're at least close to that standard, and so focusing on who's making the decisions (other than continuing to try to keep up standards) would not produce a lot of extra results. Instead, it is changes in the process that offers more realistic opportunities for improvement.
What improvements do I think of? I look at the current system as fairly command and control. Funding organizations attempt to evaluate proposals directly, with the view that they will always make the best decisions, if they get all the information. One of the theoretical problems with that is how it degrades as perfection recedes. Not all information will be available, and even if the decision makers are the best individuals to evaluate this wide variety of information, absorbing it all is difficult. That's not the end of it though, as there are biases introduced via those limitations, in that certain proposals will have greater difficulty presenting all information, or making that information consumable by decision makers, and those difficulties may have little to do with the value or viability of the proposal.
I think of this as similar to the trade-off between a command and control economy and a capitalistic one. Now, in a sense, capitalism itself is sometimes the remedy to those gaps, but capitalism has a big gap of its own when it comes to research, in that capitalism only rewards those research advances for which the value of them can be captured by a company with the rights to that value. When the actual value ends up dispersed throughout society, the rewards system of capitalism breaks down and the best outcome is no longer incentivized. A company founder must be altruistically oriented to pursue that, as well as everyone who funds that company all the way through initial funding to banks and stock market participants. While idealists do found companies sometimes, their probabilities of success decline when they don't have the support of all those other elements.
So, I like the idea of introducing a funding mechanism that recognizes idealist motivations, and doubles down on them. One thing nice about idealists is they are less concerned with their own wealth, and more concerned with what they accomplish. That doesn't mean they can totally ignore those other systems if they live in a society in which the two forms of funding are venture capital, and decision making committees.
I think you could do this by giving researchers a "research capital" budget, rather than looking at individual projects in detail (obviously, could still do both with different mixes of money). In this system, a researcher could draw from a research budget that is based upon the value of prior research successes, credentials, or committee decisions. It's that first one "research successes" that would be the most fundamentally different and the main driver of this system.. the second and third are more of a bootstrap method so that there is a door into this system for new researchers.
Defining research successes would fall back into a bureaucratic evaluation, as I see no other way to assess uncaptured value from research that's so common to basic research.
In a way, you might ask, why provide a "research budget" instead of simply providing cash? One of the main reasons is that cash brings many bad motivations, and we'd then expect there to be many more attempts to defraud committees responsible for this type of evaluation. A second is that every time a fraud did happen, it would undermine public support more if it was seen that the money got used for personal consumption rather than on research. Of course, there's still the possibility that fraud happens within research, where what is said to be spent on research is spent on personal consumption.. but one more layer makes it a bit less likely.
Another reason not to provide cash, is that it's unnecessary to do so if researchers are motivated by ideals. While you might miss out on some people without that type of motivation, or some mix of that motivation, there's still the capitalist system out there (with its flaws) for them. It's better, in my mind at least, to make the best possible system for the idealists, than to compromise on that aspect to try and pull in those whose personal motivations are already more drawn toward a capitalistic system.