For Sale: Barriers to Riches
This paper formallizes stories linking vested interests to the non- adoption of superior technologies. Coalitions of workers skilled in the operation of incumbent technologies lobby government for a prohibition on the adoption of better technologies. For reasonable parameter values, we find that the model generates significant levels of protection in equilibrium. The model also generates protection cycles that lead to TFP growth cycles. Protection has a level effect on per capita output. "Productivity slowdowns" lead to increased levels of protection. The level of protection is increasing in the venality of governments. Increased population growth rates increase the value of protection, and can lead to an increase in the level of protection.
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