Inappropriate Technology: Productivity Impacts and Policy Solutions
Paper Session
Saturday, Jan. 7, 2023 8:00 AM - 10:00 AM (CST)
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Chairs:
Daron Acemoglu, Massachusetts Institute of Technology - Karthik Sastry, Massachusetts Institute of Technology
The Labor Market Consequences of Appropriate Technology
Abstract
Developing countries rely on technology created by developed countries. This paper demonstrates that such reliance increases wage inequality but leads to greater production in developing countries. I study a Brazilian innovation program that taxed the leasing of international technology to subsidize national innovation. By exploiting heterogeneous exposure, I show that the program led firms to replace technology licensed from developed countries with in-house innovations, which led to a decline in both employment and the share of high-skilled workers. I explain these findings using a model of directed technological change and cross-country technology transactions. Firms in a developing country can either innovate or lease technology from a developed country, and these two technologies differ endogenously regarding productivity and skill bias due to factor supply disparities in the two countries. I show that the difference in skillbias and productivity can be identified using closed-form solutions by the effect of the innovation program on firms’ expenditure share with low-skilled workers and employment. By calibrating the model to reproduce these effects, I find that increasing the share of firms that patent in Brazil by 1 p.p. decreases the skilled wage premium by 0.02% and production by 0.2%.
Inappropriate Technology: Evidence from Global Agriculture
Abstract
An influential explanation for the persistence of global productivity differences is that frontier technologies are adapted for the high-income, research-intensive countries that develop them and are significantly less productive if used elsewhere. This paper studies how the environmental specificity of agricultural biotechnology affects its global diffusion and productivity consequences. We use mismatch in the presence of unique crop pests and pathogens (CPPs) as a predetermined shifter of technologies’ potential inappropriateness across locations and crops. Inappropriateness predicted by CPP mismatch reduces cross-country transfer of novel plant varieties, and the inappropriateness of frontier technology reduces crop production. Combining these estimates with an equilibrium model of global research and agricultural specialization, we find that ecological mismatch reduces global agricultural productivity by 42% and increases cross-country disparities by 15%. We use our inappropriate-technology framework to study the uneven productivity consequences of the Green Revolution, the limited use of improved seed varieties in sub-Saharan Africa, and the potential productivity effects of the emergence of new R&D leaders and of ecological disruption due to climate change.Optimal Vaccine Subsidies for Epidemic Diseases
Abstract
We analyze optimal vaccine subsidies in a model integrating disease epidemiology intoa market with rational economic agents. The focus is on an intensive vaccine campaign to quell an
epidemic in the short run. Across a range of market structures, positive vaccine externalities and
optimal subsidies peak for diseases that spread quickly, but not so quickly that everyone is driven to be vaccinated. We assess the practical relevance of this peak—as well as the existence of increasing social returns to vaccination and optimality of universal vaccination—in calibrations to the Covid-19 pandemic.
Rich-World Bias in Global Biomedical Research
Abstract
We study how global biomedical research responds to global changes in human health. We compile novel data on the universe of biomedical research articles categorized by researcher country of origin and studied diseases. We find that global biomedical research, measured by scientific article output, increases in response to disease-level burden, measured in disability-adjusted life years, with an elasticity of 0.15. This effect is driven entirely by responsiveness to disease burden in countries with above-median per capita income (elasticity 0.28), while disease burden in countries with below-median income has essentially no effect on global research (elasticity 0.02). We show that these findings are explained by a combination of home bias in disease focus and unequal research intensity across countries. We find no evidence for an alternative explanation that research in all countries focuses on a common set of rich-world diseases. We document similar patterns in the responsiveness of research to Emerging Infectious Disease (EID) events, as categorized by the epidemiological literature (Jones et al., 2008). We discuss implications for global science policy and preparedness for future disease outbreaks.JEL Classifications
- O3 - Innovation; Research and Development; Technological Change; Intellectual Property Rights
- O4 - Economic Growth and Aggregate Productivity