Rent-Seeking and Innovation
نویسنده
چکیده
Innovations and their adoption are the keys to growth and development. Innovations are less socially useful, but more profitable for the innovator, when they are adopted slowly and the innovator remains a monopolist. For this reason, rent-seeking, both public and private, plays an important role in determining the social usefulness of innovations. This paper examines the political economy of intellectual property, analyzing the trade-off between private and public rent-seeking. While it is true in principle that public rent-seeking may be a substitute for private rent-seeking, it is not true that this results always either in less private rent-seeking or in a welfare improvement. When the public sector itself is selfish and behaves rationally, we may experience the worse of public and private rent-seeking together. Date: First Version: March 3, 2003, This Version: 16th April 2003. Both authors thank the National Science Foundation and Boldrin thanks the University of Minnesota Grants in Aid Program, and the BEC2002-04294-C02-01project for financial
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