International Linkages and National Innovation Rates: An Exploratory Probe1

The conventional wisdom among political economists holds that domestic institutions determine national innovation rates. However, after decades of research, there is still no agreement on precisely which domestic institutions matter or exactly how they affect innovation rates. Anecdotal observations within the research on institutions suggest that international linkages may be the missing piece to the national innovation rate puzzle. An exploratory probe is therefore performed here using regression analysis of various measures of innovation, domestic institutions, and international linkages. The results suggest that countries' relationships with the lead innovator strongly affect their innovation rates. The probe further suggests that research should move beyond institutions and linkages, and should focus instead on their political origins. That is, the current focus on institutions or linkages studies effects, not causes. It fails to get at the politics of technological change: the fundamental choices which nations must make in order to innovate successfully in the long run. Copyright 2009 by The Policy Studies Organization.

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