Resistance to Technology Adoption

The adoption of new technologies is fundamental for economic development. This might have led one to expect that the more technologically backward a country the more fervently it would adopt new technologies.  Yet in fact, one of the greatest difficulties with the process of economic development is precisely the resistance among entrenched interest groups to technological change.  Because such groups anticipate the resultant loss of income they may try to block the introduction of new technologies through outright conflict.  Famous historical examples are the Luddites and the Captain Swing revolts.    Other blocking mechanisms do not rely on direct conflict and usually aim at securing some form of protection from the government.  This is clear in the case where firms and workers lobby against trade liberalization or deregulation of markets.  There are also indirect mechanisms that can involve, for example, deliberate failure to protect property rights.  The reason is that groups who become wealthier as a result of the adoption of new technology can dispute the political position of an incumbent group, providing the incumbent with an incentive to undermine property rights protection and hence technology adoption.

Acemoglu, Daron and James A. Robinson (2000) “Political Losers as a Barrier to Economic DevelopmentAmerican Economic Review, 90 (2): 126-130.

Acemoglu, Daron and James A. Robinson (2006) “Economic Backwardness in Political Perspective”, American Political Science Review, 100 (1): 115–131. [Working paper version]

Bellettini, Giorgio and Ottaviano, Gianmarco I. P. (2005) “Special interests and technological changeReview of Economic Studies, 72 (1): 43-56. [Working paper version]

Bridgman, Benjamin R., Igor D. Livshits, and James C. MacGee (2007) “Vested Interests and Technology Adoption”, Journal of Monetary Economics, 54 (3): 649-666.

Bourguignon, Francois, and Thierry Verdier (2000) “Oligarchy, Democracy, Inequality and Growth”, Journal of Development Economics, 62 (August): 285–313.

Cuberes, David and Michał Jerzmanowski (2009) “Democracy, Diversification and Growth Reversals”, Economic Journal, 119 (540): 1270-1302. [Working paper version]

Gancia, Gino and Fabrizio Zilibotti (2009) “Technological Change and the Wealth of Nations“ Annual Review of Economics, 1: 93-120. [Working paper version]

Gonzalez, Francisco M. (2005) “Insecure property and technological backwardness”, Economic Journal, 115 (505): 703-721 

Kuznets, Simon (1968) “Towards a Theory of Economic GrowthYale University Press, New Haven.

Mokyr, Joel (1990) “The Lever of Riches, Oxford University Press, Oxford

Olson, Mancur (1982) “The Rise and Decline of Nations: Economic Growth, Stagflation, and Social Rigidities, Yale University Press, New Haven

Parente, Stephen L. and Edward C. Prescott. 1999. “Monopoly Rights: A Barrier to Riches.” American Economic Review, 89: 1216–33.

Saint-Paul, Gilles (2002) “The Political Economy of Employment ProtectionJournal of Political Economy, 110 (3): 672-704. [Working paper version]