• Corpus ID: 30404743

Innovation and Fiscal Decentralization in Transitional Economies

  title={Innovation and Fiscal Decentralization in Transitional Economies},
  author={Ting-Fai Yu},
In this paper, I build a theoretical model of the innovation decision in transitional economies. Innovation often erodes the economic interests of certain interest groups. To block innovation, an interest group can choose to overthrow the central ruler who adopts innovation policy, or to bribe the local leader who implements the innovation policy. Therefore, for the central ruler, innovation has two major costs. One derives from the overthrow effect imposed by the interest group, and the other… 
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