For Sale: Barriers to Riches

Benjamin Bridgman (), Igor Livshits () and James MacGee ()

No 20043, University of Western Ontario, RBC Financial Group Economic Policy Research Institute Working Papers from University of Western Ontario, RBC Financial Group Economic Policy Research Institute

Abstract: 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.

Keywords: vested interests; technology adoption; barriers (search for similar items in EconPapers)
JEL-codes: O4 F43 D72 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dev and nep-dge
Date: 2004
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