A New Institutional Approach to Innovation Policy

8 Pages Posted: 3 Jun 2016

Multiple version iconThere are 2 versions of this paper

Date Written: June 2016


Modern research and innovation policy is largely based on neoclassical welfare economics, in which the diagnosis of market failure in the production of new information is translated into a case for innovation policy. Both New Institutional and Public Choice economics criticise this approach because it tends to assume that policy interventions are largely costless and produce only benefits. An alternative policy model is proposed that focuses on minimising the social costs of innovation policy through efficient choice of institutions. We review the recently released National Innovation and Science Agenda through this lens.

Suggested Citation

Davidson, Sinclair and Potts, Jason, A New Institutional Approach to Innovation Policy (June 2016). Australian Economic Review, Vol. 49, Issue 2, pp. 200-207, 2016, Available at SSRN: https://ssrn.com/abstract=2788269 or http://dx.doi.org/10.1111/1467-8462.12153

Sinclair Davidson (Contact Author)

RMIT University ( email )

124 La Trobe Street
Melbourne, 3000

Jason Potts

RMIT University ( email )

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