How the quality of institutions affects technological deepening in developing countries

George Clarke

No 2603, Policy Research Working Paper Series from The World Bank

Abstract: This paper assesses the effect of institutional quality on research and development (R&D) expenditures in developing countries. The paper finds that the risk of expropriation and the rule of law are correlated with R&D expenditures. Since both institutional variables increase as institutional quality improves (i.e., as risk of expropriation decreases and rule of law improves), this suggests that stronger institutions encourage greater R&D expenditures. The result for the risk of expropriation is more highly significant and far more robust than the result for the'rule of law'. Although R&D is not the primary way that developing countries gain access to technology, this result is interesting for at least two reasons. First, R&D might encourage technological deepening better than other methods that developing countries use to gain access to technology (e.g., through foreign direct investment (FDI) or capital goods imports). Second, past work has shown that another important way that developing countries gain access to technology, through FDI, is also positively correlated with institutional quality (i.e., as institutional quality improves, FDI increases).

Keywords: International Terrorism&Counterterrorism; Environmental Economics&Policies; Decentralization; Economic Theory&Research; Health Economics&Finance; Environmental Economics&Policies; Economic Theory&Research; Scientific Research&Science Parks; Science Education; International Terrorism&Counterterrorism (search for similar items in EconPapers)
Date: 2001-04-25
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (31)

Downloads: (external link)
http://www-wds.worldbank.org/external/default/WDSC ... ered/PDF/wps2603.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wbk:wbrwps:2603

Access Statistics for this paper

More papers in Policy Research Working Paper Series from The World Bank 1818 H Street, N.W., Washington, DC 20433. Contact information at EDIRC.
Bibliographic data for series maintained by Roula I. Yazigi ().