Monopoly Rights: A Barrier to Riches

Abstract

Our thesis is that poor countries are poor because they employ arrangements for which the equilibrium outcomes are characterized by inferior technologies being used, and being used inefficiently. In this paper, we analyze the consequences of one such arrangement. In each industry, the arrangement enables a coalition of factor suppliers to be the monopoly seller of its input services to all firms using a particular production process. We find that eliminating this monopoly arrangement could well increase output by roughly a factor of 3 without any increase in inputs.

The Curley Effect: The Economics of Shaping the Electorate

“…Finally, our model is related to a large literature on the adverse consequences of redistributive policies on economic development. Typically, this literature takes the point of view that inefficient redistribution or other wasteful policies are sought by interest groups either seeking rents or protecting the existing rents (Grossman and Helpman 2001, Krusell and Rios-Rull 1996, Parente and Prescott 1999). In our model, by contrast, incumbent politicians rather than interest groups seek inefficient policies, because such policies help them get re-elected.…”

TFP Convergence Across European Regions: A Comparative Spatial Dynamics Analysis

“…This evidence is usually explained by differences in human capital stocks, as firstly suggested by Nelson and Phelps (1966), and/or by institutional quality heterogeneity, (Hall and Jones, 1999;Acemoglu et al, 2001and 2006, Comin et al, 2009, and/or by the existence of monopoly rights of various forms that create a barrier to technology adoption, as in Parente and Prescott (1999). However, more puzzling is the evidence that slow processes of technology adoption are observed even across similar leading countries of the world economy (Comin andHobijn, 2004 andComin et al 2006) or across regions within the same country or within union of states (see Magrini, 2004, for a review).…”

Biased Technical Change, Intermediate Goods, and Total Factor Productivity

“…A simple input-output model is used 15 See for instance Baldwin and Robert-Nicoud (2006). 16 Firms with more than …fteen employees face an employment protection legislation more restrictive than …rms with …fteen or less employees. See Guner, Ventura and Xu (forthcoming) for details.…”

“…14 incentive to remain small because of the labor legislation. 16 It follows that a …rm might …nd more pro…table to buy intermediates from an external …rm, which is less e¢ cient, than to produce the intermediate itself at a higher level of e¢ ciency.…”