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R&D in developing countries: what should governments do?

By J. Peter Neary

Abstract

I consider the implications of recent research for R&D policy in developing countries. Typical new growth models, which assume free entry and no strategic behaviour by R&D producers, are less appropriate for policy guidance than strategic oligopoly models. But the latter have ambiguous implications for targeted R&D subsidies, and caution against the anti-competitive effects of research joint ventures. A better policy is to raise the economy-wide level of research expertise. This avoids the need for governments to pick winners, is less prone to capture, and dilutes the strategic disincentive to undertake R&D with unappropriable spillovers

Topics: H Social Sciences (General)
Publisher: Centre for Economic Performance, London School of Economics and Political Science
Year: 2000
OAI identifier: oai:eprints.lse.ac.uk:20174
Provided by: LSE Research Online

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