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Political decentralization and technological innovation: testing the innovative advantages of decentralized states

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Taylor, Mark Zachary

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Abstract

Although never rigorously tested, it has become a sort of accepted wisdom amongst social scientists that government decentralization offers key advantages for innovators. Decentralized governments are widely seen as agile, competitive, and well structured to adapt to innovation’s gale of creative destruction. Meanwhile, centralized states, even when democratic, have come to be viewed as rigid and thus hostile to the risks, costs, and change associated with new technology; or are subject to capture by status-quo interest groups which use their influence to promote policies which ultimately restrict technological change. Therefore decentralized government is often perceived as a necessary institutional foundation for encouraging long-run technological innovation. In the following article, this wisdom is tested using data on international patent activity, scientific publications, and high-technology exports. The results suggest that the supposed technological advantages of decentralized states are a fiction, and that international pressures may be more important.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 10996.

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Date of creation: 2007
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Publication status: Published in Review of Policy Research 24.3(2007): pp. 231-257
Handle: RePEc:pra:mprapa:10996

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Related research
Keywords: technology; innovation; decentralization; federalism; patents; technological; invention;

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Find related papers by JEL classification:
O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
O38 - Economic Development, Technological Change, and Growth - - Technological Change - - - Government Policy
H1 - Public Economics - - Structure and Scope of Government
O31 - Economic Development, Technological Change, and Growth - - Technological Change - - - Innovation and Invention: Processes and Incentives
O14 - Economic Development, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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