KNOWING THE RIGHT PERSON IN THE RIGHT PLACE: POLITICAL CONNECTIONS AND RESISTANCE TO CHANGE
研究在位政治家如何利用繁文缛节促使企业投资政治关联，从而阻碍先进竞争者进入并导致技术落后，为低效民主制度和政治技术壁垒的持续存在提供解释。
In a political economy model of Schumpeterian growth with entry, we investigate how an incumbent politician can strategically use the level of red tape to acquire incumbency advantage. By setting sufficiently high red tape, the politician induces the incumbent firm in the intermediate sector to invest in political connections which are valued also by voters, who recognize that bureaucratic costs can be reduced by connected firms. Within this framework, we study the Markov perfect equilibria of an infinitely repeated game between politicians, firms and voters and show that all equilibria are characterized by investment in political connections and re-election of the incumbent politician. Political connections may prevent entry of advanced competitors and cause the economy to lag behind the technological frontier. Our model provides a possible explanation for the persistence of inefficient democracies and political barriers to technology development, where these reflect shared rather than conflicting interests.