The theory developed in Chapter 2 posits that well-institutionalized parties’ overlapping generations membership structures extend their policymaking horizons. In turn, those long horizons make more palatable the deferred-but-increasing returns associated with technology policies. As a consequence, well-institutionalized parties will tend to place a greater premium on supplying those policies than poorly institutionalized parties will.

In this chapter, I test two predictions that follow from this argument. The first is the reduced-form expectation that where wellinstitutionalized parties rule, countries will exhibit more technological progress. The second expectation is that the reason for this positive correlation is that well-institutionalized parties do a better job mitigating against the market failures to technological progress.

Notice, though, that this second prediction can be broken down into two distinct expectations of its own. It could imply that wellinstitutionalized parties supply technology policies in higher quantities than poorly institutionalized ruling parties do. That is to say it could be that when they rule, well-institutionalized parties make available more resources for education services or R&D financing, and they could have stronger intellectual property rights. Or, the expectation could be understood as suggesting that institutionalized parties supply technology policies more efficaciously than poorly institutionalized parties do, such that similar policy levels produce very different economic outcomes. The two possibilities are not mutually exclusive, but in any event, testing the theory fully requires assessing both pathways.

To anticipate the conclusions, the accumulated evidence presented in this chapter strongly supports my theory. Estimates derived from cross-national samples of countries of all levels of economic and political development show that countries governed by wellinstitutionalized parties have higher levels of technological progress. Specifically, I find that residents of countries where ruling parties are institutionalized receive more patent grants, and they spend more on R&D as a percent of the country's GDP. Furthermore, these outcomes derive from the fact that where institutionalized parties govern, politicians assign a higher premium on ameliorating the market failures that would otherwise stymie technological progress.