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Political decentralization and technological innovation: testing the innovative advantages of decentralized states

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  • Taylor, Mark Zachary

Abstract

Although never rigorously tested, it has become a sort of accepted wisdom amongst social scientists that government decentralization offers key advantages for innovators. Decentralized governments are widely seen as agile, competitive, and well structured to adapt to innovation’s gale of creative destruction. Meanwhile, centralized states, even when democratic, have come to be viewed as rigid and thus hostile to the risks, costs, and change associated with new technology; or are subject to capture by status-quo interest groups which use their influence to promote policies which ultimately restrict technological change. Therefore decentralized government is often perceived as a necessary institutional foundation for encouraging long-run technological innovation. In the following article, this wisdom is tested using data on international patent activity, scientific publications, and high-technology exports. The results suggest that the supposed technological advantages of decentralized states are a fiction, and that international pressures may be more important.

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  • Taylor, Mark Zachary, 2007. "Political decentralization and technological innovation: testing the innovative advantages of decentralized states," MPRA Paper 10996, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:10996
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    1. Kassouri, Yacouba, 2022. "Fiscal decentralization and public budgets for energy RD&D: A race to the bottom?," Energy Policy, Elsevier, vol. 161(C).
    2. Chi, Meiqing & Muhammad, Sulaman & Khan, Zeeshan & Ali, Shahid & Li, Rita Yi Man, 2021. "Is centralization killing innovation? The success story of technological innovation in fiscally decentralized countries," Technological Forecasting and Social Change, Elsevier, vol. 168(C).
    3. Fortuna Casoria & Marianna Marino & Pierpaolo Parrotta & Davide Sala, 2019. "Local Government and Innovation: the case of Italian provinces," Working Papers halshs-02278092, HAL.
    4. CHEAH, Sarah Lai-Yin & HO, Yuen-Ping & LI, Shiyu, 2020. "How the effect of opportunity discovery on innovation outcome differs between DIY laboratories and public research institutes: The role of industry turbulence and knowledge generation in the case of S," Technological Forecasting and Social Change, Elsevier, vol. 160(C).
    5. Bryan K. Ritchie, 2010. "Systemic Vulnerability and Sustainable Economic Growth," Books, Edward Elgar Publishing, number 13731.
    6. Feng-Shang Wu & Hong-Ji Huang, 2024. "Why Do Some Countries Innovate Better than Others? A New Perspective of Science, Technology, and Innovation Policy Regimes and National Absorptive Capacity," Sustainability, MDPI, vol. 16(7), pages 1-30, March.
    7. Maria João Camelo de Barros, 2011. "Decentralization of public policies for the promotion of firms’ internationalization. A proposal," Economics and Management Research Projects: An International Journal, Open Access International Journals, vol. 1(1), pages 66-78, December.
    8. Feng, Suling & Sui, Bo & Liu, Huimin & Li, Guoxiang, 2020. "Environmental decentralization and innovation in China," Economic Modelling, Elsevier, vol. 93(C), pages 660-674.
    9. Emmanuel Muller & Andrea Zenker & Miriam Hufnagl & Jean-Alain Héraud & Esther Schnabl & Teemu Makkonen & Henning Kroll, 2017. "Smart specialisation strategies and cross-border integration of regional innovation systems: Policy dynamics and challenges for the Upper Rhine," Environment and Planning C, , vol. 35(4), pages 684-702, June.
    10. Jose Guimon, 2014. "Regional Inovation Policy and Multilevel Governance in Developing Countries," World Bank Publications - Reports 23655, The World Bank Group.
    11. Libman, Alexander, 2009. "Models of market integration in Central Asia – comparative performance," MPRA Paper 17510, University Library of Munich, Germany.
    12. Shu-Hao Chang, 2017. "The evolutionary growth estimation model of international cooperative patent networks," Scientometrics, Springer;Akadémiai Kiadó, vol. 112(2), pages 711-729, August.
    13. Libman, Alexander, 2008. "Informal regionalism in Central Asia: subnational and international levels," MPRA Paper 26417, University Library of Munich, Germany.
    14. Dina Balalaeva, 2012. "Innovations as Public Goods Provision with Negative Externalities: Role of Parliamentarism," HSE Working papers WP BRP 06/PS/2012, National Research University Higher School of Economics.
    15. Gao, Yanyan & Zang, Leizhen & Roth, Antoine & Wang, Puqu, 2017. "Does democracy cause innovation? An empirical test of the popper hypothesis," Research Policy, Elsevier, vol. 46(7), pages 1272-1283.

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    More about this item

    Keywords

    technology; innovation; decentralization; federalism; patents; technological; invention;
    All these keywords.

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • H1 - Public Economics - - Structure and Scope of Government
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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