Institutions-technologies interaction and economic growth

Abstract

The paper explores the interactions between technologies and institutions in terms of their influence on economic growth. The author demonstrates that long-term economic growth is determined by as a complex of causes including quality of institutional environment, and national innovative capacity. The economist introduces a working definition of technology as a set of material artefacts (things and / or living organisms) utilized by individuals followed by technological norms (rules) to transform resources into desired results (products). As opposed to other norms, the enforcement mechanism of technological norms includes not only managers’ actions on maintaining technological discipline, but also laws of nature. Workers’ compliance with technological norms (level of technological discipline) rests on their subjective norms that in turn are connected with tightness / looseness of national culture and institutional environment. Diffusion of new technologies within and across economy depends on firms’ incentives as potential recipients of them, and the incentives are determined by the level of competition in the economy and level of economic freedom, i.e. quality of institutional environment. Finally, the paper discusses the factors behind the development of Russia’s innovative capacity that influence economic growth