Rent-seeking and innovation

Michele Boldrin () and David K. Levine

No 347, Staff Report from Federal Reserve Bank of Minneapolis

Abstract: Innovations and their adoption are the keys to growth and development. Innovations are less socially useful, but more profitable for the innovator, when they are adopted slowly and the innovator remains a monopolist. For this reason, rent-seeking, both public and private, plays an important role in determining the social usefulness of innovations. This paper examines the political economy of intellectual property, analyzing the trade-off between private and public rent-seeking. While it is true in principle that public rent-seeking may be a substitute for private rent-seeking, it is not true that this results always either in less private rent-seeking or in a welfare improvement. When the public sector itself is selfish and behaves rationally, we may experience the worst of public and private rent-seeking together.

Keywords: Rent (Economic theory); Technological innovations; Intellectual property (search for similar items in EconPapers)
Date: 2004
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Related works:
Working Paper: Rent Seeking and Innovation (2003)
Working Paper: Rent Seeking and Innovation (2003)
Journal Article: Rent-seeking and innovation (2004)
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