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Rent-Seeking Government and Endogenous Takeoff in a Schumpeterian Economy

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  • Chu, Angus C.

Abstract

This study explores how the rent-seeking behavior of the government may impede economic development and delay industrialization. Introducing a rent-seeking government to the Schumpeterian growth model with endogenous takeoff, we find that a more self-interested government engages more in rent-seeking taxation, which delays the transition of the economy from pre-industrial stagnation to modern economic growth. Quantitatively, a completely self-interested government delays industrialization, relative to a benevolent government, by eight decades.

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  • Chu, Angus C., 2020. "Rent-Seeking Government and Endogenous Takeoff in a Schumpeterian Economy," MPRA Paper 104974, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:104974
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    Cited by:

    1. Chu, Angus C. & Peretto, Pietro & Xu, Rongxin, 2023. "Export-led takeoff in a Schumpeterian economy," Journal of International Economics, Elsevier, vol. 145(C).
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    3. Chu, Angus & Cozzi, Guido & Fan, Haichao, 2022. "Natural Selection and Innovation-Driven Growth," MPRA Paper 113502, University Library of Munich, Germany.

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    More about this item

    Keywords

    rent-seeking government; endogenous takeoff; industrialization;
    All these keywords.

    JEL classification:

    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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