Barriers to Technology Adoption and Entry * Igor D. Livshits † University of Western Ontario, CIAR James C. MacGee University of Western Ontario July 30, 2006 Abstract A key feature of recent work on barriers to technology adoption is the assumption that monopoly rights of insiders are limited by the ability of industry outsiders to enter. This paper endogenizes the decision of a government to provide barriers to technology adoption alone or in combination with barriers to entry of outsiders. Using a political economy model, we find that a government provides barriers to both technology adoption and outsider entry. If governments are not too “corrupt”, restricting their ability to provide barriers to entry may eliminate barriers to adoption. However, for sufficiently “corrupt” governments, prohibiting barriers to entry leads to more extreme barriers to technology adoption. JEL Codes: O4, F43, D72. Keywords: Monopoly rights, technology adoption, lobbying, entry. * We thank the editor and an anonymous referee as well as seminar participants at the CIAR 2004 meetings in Toronto for useful comments. We are especially grateful to Ben Bridgman for his insights in related joint work. † Corresponding author. Department of Economics, University of Western Ontario, London, Ontario, N6A 5C2, Canada. Tel.: + 1-519-661-2111, ext 85539; fax: + 1-519-661-3666. E-mail: livshits@uwo.ca 1