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The Revolutionary Power of Peripheral Agencies: Explaining Radical Policy Innovation in Finland and Israel

Forthcoming in Comparative Political Studies (Volume 46, Issue 10, Oct. 2013)

38 Pages Posted: 21 Dec 2012  

Dan Breznitz

Georgia Institute of Technology

Darius Ornston

University of Georgia - School of Public and International Affairs

Date Written: December 20, 2012

Abstract

This paper challenges the long-standing emphasis in the developmental state literature on the powerful pilot agency as an essential component of industrialization. While a pilot agency may be able to facilitate growth in mature industries, we argue that policy-makers seeking to promote rapid innovation-based competition must instead rely on continuous, radical policy innovation. We argue that this kind of experimentation is more likely to occur at the periphery of the public sector, in agencies with few hard resources and limited political prestige. In addition to providing a novel interpretation of how states enter new, high technology markets, we explain why some successful countries become less innovative over time. As agencies successfully introduce radical policy innovations, their higher profile exposes them to greater political interference and reduces their entrepreneurial capacity. The argument is supported by within-case analysis of two historically low-technology economies that successfully promoted rapid innovation-based growth, Finland and Israel.

Keywords: Policy Innovation, Industrialization, Comparative Political Economy of Development, Developmental State, Innovation Policy, Finland, Israel

JEL Classification: D2, D6, D73, E61, H1, H4, L5, O1, O2, O38, P52

Suggested Citation

Breznitz, Dan and Ornston, Darius, The Revolutionary Power of Peripheral Agencies: Explaining Radical Policy Innovation in Finland and Israel (December 20, 2012). Forthcoming in Comparative Political Studies (Volume 46, Issue 10, Oct. 2013) . Available at SSRN: https://ssrn.com/abstract=2191994

Dan Breznitz (Contact Author)

Georgia Institute of Technology ( email )

Atlanta, GA 30332
United States

Darius Ornston

University of Georgia - School of Public and International Affairs ( email )

Athens, GA 30602-6254
United States

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