For Sale: Barriers to Riches∗

This paper formalizes stories linking vested interests to the non-adoption of superior technologies. Coalitions of workers skilled in the operation of incumbent technologies lobby government for a prohibition on the adoption of better technologies. For reason-able parameter values, we find that the model generates significant levels of protection in equilibrium. The model also generates protection cycles that lead to TFP growth cycles. Protection has a level effect on per capita output. “Productivity slowdowns” lead to increased levels of protection. The level of protection is increasing in the venal-ity of governments. Increased population growth rates increase the value of protection, and can lead to an increase in the level of protection