How does government ideology affects innovation?

Abstract

The purpose of this paper is to further investigate and contribute to the existing literature about government ideology and it’s effects on economy and innovation. This is be meaningful not only for voters, to help them choose the ruling party that would adjust more to the country’s needs and offer implications and information for companies to make the proper decision to promote their level of innovation

but also for anyone related to politics since they use ideologies to justify their power and to persuade the people to obey, follow and support them, rulers use ideologies of various kinds. Since the government definitely plays a big role in the innovation progress and economic growth, and ruling parties with different ideologies have different orientations, policy preferences, ethical ideals, principles, doctrines, myths and symbols and it has already been proven that ideology does affects economic growth and innovation, we can’t help but wonder: what effects do a left-wing, rightwing and center wing parties have on the process of innovation? How do these government ideology changes affect the innovation? This study further deepens the relationship between innovation with government ideology by classifying countries according to their level of income and running several panel regressions lagging the main variable to measure it’s effect over time for around 136 countries. Results definitely show a negative relationship between innovation and ideology, however it is only shown for middle income countries and below.