Slow development and special interests

Research output: Contribution to journalReview articlepeer-review

Abstract

This article argues that a natural implication of an innovation-based theory of growth is that slow development facilitates the formation of special interest groups. We demonstrate this in a growth model where innovations take the form of new goods and new production processes, and where factor suppliers in individual industries can organize to form rent-extracting special interest groups. We then examine the effect these groups have on an economy's subsequent development. We find that these groups can retard an economy's development for extended periods, but not permanently. Their long-run effect is to increase the volatility of the development process.

Original languageEnglish (US)
Pages (from-to)991-1011
Number of pages21
JournalInternational Economic Review
Volume47
Issue number3
DOIs
StatePublished - Aug 1 2006

ASJC Scopus subject areas

  • Economics and Econometrics

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