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The puzzling politics of R&D: Signaling competence through risky projects

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  • Lamberova, Natalia

Abstract

Why do some leaders devote significant funds to research and development (R&D) even though such investments are risky, less visible to the public than many other investments, and typically bear fruit only after the incumbent has already left office? This paper suggests that investing in R&D improves the incumbent's perceived competence among voters. Using a formal model of signaling, survey experiments conducted in the US and Russia, and corroborating cross-country evidence, I demonstrate that investment in R&D improves perceptions of incumbent competence and approval of the government among the citizenry.

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  • Lamberova, Natalia, 2021. "The puzzling politics of R&D: Signaling competence through risky projects," Journal of Comparative Economics, Elsevier, vol. 49(3), pages 801-818.
    • Handle: RePEc:eee:jcecon:v:49:y:2021:i:3:p:801-818
    DOI: 10.1016/j.jce.2021.01.002
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    2. Mihaela Curea, 2023. "Intangible assets and resource allocation: insights from European companies," Journal of Financial Studies, Institute of Financial Studies, vol. 15(8), pages 86-105, November.
    3. repec:fst:rfsisf:v:8:y:2023:i:15:p:86-105 is not listed on IDEAS

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    More about this item

    Keywords

    Public policy; Research and development; Signaling; Survey experiments;
    All these keywords.

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods

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