Authors:

  • Jeffry Frieden

Abstract

September 19, 2020, Paper: "Why do some societies embrace innovation, while others resist it? New ideas, policies, and technologies often challenge existing patterns of social and economic activity. We present a model of the reception of innovation by incumbent economic interests. The analysis reveals the features of an innovation that determine whether it will be appropriated by the incumbent (and entry regulated), blocked, encouraged, or taxed (and entry encouraged). These six features are: whether its impact is broad or narrow; whether it complements or competes with the elite’s sources of income; whether it is location-dependent, concealable, and easily replicable; whether it implies large fixed costs. While many of these factors have been considered on their own in other work, we assess them together. We provide illustrative evidence of the relevance and generality of the model to understand the fate of a variety of innovations."