Conditions for Successful Technology Policy in Developing Countries : Learning Rents, State Structures and Institutions

The paper develops an analysis of the economic, political, and institutional conditions for successful design and implementation of technology policy in developing countries. After a brief introduction (section 1), we discuss contending economic theories of technological change and technology policy (section 2). It is concluded that, despite many pro-market arguments, market imperfections inherent in the process of technological change make the creation of learning and innovation rents by the state potentially very beneficial, especially in developing countries. The next section (section 3) analyses the political and institutional factors that determine how effectively such rents can be created and managed. Then we discuss how the scope of technology policy in developing countries is affected by the recent changes in domestic and international policy contexts such as domestic deregulation and the emergence of a "liberal" world order represented by the WTO (section 4). The paper ends with a brief conclusion (section 5).