Working Paper: NBER ID: w11022
Authors: Diego Comin; Bart Hobijn
Abstract: This paper explores whether lobbies slow down technology diffusion. To answer this question, we exploit the differential effect of various institutional attributes that should affect the costs of erecting barriers when the new technology has a technologically close predecessor but not otherwise. We implement this test in a unique dataset compiled by us that covers the diffusion of 20 technologies for 23 countries over the past two centuries. We find that each of the relevant institutional variables that affect the costs of erecting barriers has a significantly larger effect on the diffusion of technologies with a competing predecessor technology than when no such a technology exists. These effects are quantitatively important. Thus, we conclude that lobbies are an important barrier to technology adoption and to development.
Keywords: technology diffusion; lobbies; political barriers; institutional attributes
JEL Codes: N10; O30; O57
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| institutional variables affecting the costs of erecting barriers to technology diffusion (O33) | speed of diffusion of technologies with competing predecessors (O33) |
| higher costs of lobbying (D72) | faster diffusion of technologies with close predecessors (O33) |
| effective judicial systems and democratic regimes (O17) | acceleration of technology diffusion (O33) |
| low lobbying costs in military regimes or less independent legislatures (D72) | slowed down diffusion of technologies (O33) |
| barriers raised by lobbies (D72) | impediment to technology diffusion (O33) |