In this paper we put forward a model of basic research and long-run economic growth in which the incentives of social reward to scientific work may produce increasing returns and multiple equilibria. The state organizes production of new knowledge - a public good that improves firms technology - with taxes on the private sector. Scientists compete with one another to attain priority over a discovery and be awarded both a real prize and prestige in the scientific community. Also, scientists derive job motivation from dedication to science which provides social status. Analysis of the model shows, on the one hand, a low equilibrium where the economy is endowed with a small science sector, researchers have high relative income but low prestige, and competition for discoveries is weak. On the other hand, there is a high equilibrium where the economy has a large science sector, scientists obtain for new findings high prestige but lower relative salaries and, as the e¤ect of creative destruction is strong, there is fierce competition among researchers. Comparative statics shows that if the scientific infrastructure is poor, policies that increase the marginal benefits from a discovery have perverse e¤ects, while policies aimed at improving the selection mechanism of researchers work well. The same policies have opposite effects at the high steady state.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
file. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Publisher Info
Paper provided by D.E.S. (Department of Economic Studies), University of Naples "Parthenope", Italy in its series Discussion Papers with number
10_2006.
Find related papers by JEL classification: O31 - Economic Development, Technological Change, and Growth - - Technological Change - - - Innovation and Invention: Processes and Incentives Z10 - Other Special Topics - - Cultural Economics - - - General H40 - Public Economics - - Publicly Provided Goods - - - General O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.: