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Industrial policy, collective action, and the direction of technological change

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  • Temel, Tugrul

Abstract

This paper studies patterns of technological change under two scenarios. In Scenario I, a distorted government is open to the influence of producers' collective action, while in Scenario II a benevolent government operates to maximize national income. The paper draws attention to the role that institutional arrangements and asymmetries in sectoral technology absorption play in shaping the path of technological change. Simulation results are threefold. First, biased institutions under Scenario I might help drag the economy towards the right trajectory, with current generations experiencing welfare loss. Secondly, the benevolent government under Scenario II supports the path of capital-augmenting technological change, which is also supported by the distorted government only when institutions deliberately favor the investment goods producing sector. Thirdly, sectoral asymmetries in technology assimilation do not help industries overcome disadvantageous situations in the political market, and hence do not in�uence the direction of technological developments.

Suggested Citation

  • Temel, Tugrul, 2011. "Industrial policy, collective action, and the direction of technological change," MPRA Paper 31917, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:31917
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    More about this item

    Keywords

    Technological change; industrial policy and lobbying; political-economic equilibrium.;
    All these keywords.

    JEL classification:

    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • P26 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Property Rights

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