Innovation and Interdependence: Evidence from Gene-Editing Technology

Abstract

Technological breakthroughs carry great promise but often escalate economic competition and heighten public anxiety, creating new challenges for governments. We argue that breakthroughs trigger two distinct mechanisms that reshape regulatory politics: (1) accelerated incentives for regulatory arbitrage and (2) the potential for controversies to spark international public backlash. First, technological advancement generates forum-shopping behavior as private actors race to develop the new technology. Researchers and firms may seek to evade national rules by relocating to more permissive jurisdictions. Second, public unease about new technologies creates the potential for backlash in the wake of controversial applications. This backlash can spill across borders: accidents or misuse in one jurisdiction undermine support for research and commercial development elsewhere. Together, these processes link the regulatory fate of states, undermining their ability to regulate in isolation. We test and find evidence for these mechanisms in the domain of gene editing, a field that has been transformed by the introduction of CRISPR technology in 2012. Our theory and findings shed new light on the regulatory politics of breakthrough technologies.