The paradox of government-funded innovation in weakly institutionalized environments

Government intention to spur innovation can result in the proliferation of low-quality patents, which is especially pronounced in countries with a low level of government accountability. This study examines the paradoxical effects of government-funded innovation in weakly institutionalized environments. I offer a gametheoretic model, in which the government has a stake in technological development and invests in research and development, although this encourages the growth of low-quality patents. Using Russian patents data between 1998 and 2016, I illustrate this mechanism by demonstrating the causal impact of Russia's government policy, which resulted in a simultaneous increase in the number of patents and a decrease in the absolute number of high-quality patents in the patent pool. This study provides a theoretical background for evaluating the impact of political incentives for investing in the creation of new technologies in the technological development of countries. (c) 2024 The Author. Published by Elsevier Espa & ntilde;a, S.L.U. on behalf of Journal of Innovation & Knowledge. This is an open access article under the CC BY license (http://creativecommons.org/licenses/by/4.0/)