Industrial Policy, Collective Action, and the Direction of Technological Change

Posted: 13 Jan 1999

See all articles by Tugrul T. Temel

Tugrul T. Temel

VU University Amsterdam - Center for World Food Studies

Terry L. Roe

University of Minnesota - College of Agricultural, Food and Environmental Sciences - Department of Applied Economics

Abstract

In this study we assume that government is distorted as it is open to the influence of producers' collective action. Remaining within the confines of industrial policy debates, the study draws attention to the role that institutional arrangements and asymmetries in sectoral technology absorption play in affecting the path of technological change. Simulation results are threefold. First, biased institutions under the distorted government might, indeed, help drag the economy towards the right direction. In this process, current generations would experience welfare loss, while a technologically advantageous environment is prepared for future generations. Secondly, the undistorted government supports the path of capital-augmenting technological change, and this path is also supported by the distorted government only if institutions deliberately favor the investment goods producing sector. Thirdly, sectoral asymmetries in technology assimilation do not help industries overcome disadvantageous situations in the political market, and hence do not influence the direction of technological developments.

JEL Classification: O33, O38, P26

Suggested Citation

Temel, Tugrul T. and Roe, Terry L., Industrial Policy, Collective Action, and the Direction of Technological Change. Available at SSRN: https://ssrn.com/abstract=143271

Tugrul T. Temel (Contact Author)

VU University Amsterdam - Center for World Food Studies ( email )

De Boelelaen 1105
1081 HV Amsterdam, 1081 HV
Netherlands
+3120 444 9310 (Phone)
+3120 444 9325 (Fax)

Terry L. Roe

University of Minnesota - College of Agricultural, Food and Environmental Sciences - Department of Applied Economics ( email )

1994 Buford Avenue
St. Paul, MN 55108
United States

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