Ideology, Human Capital, and Growth

We develop an endogenous growth model in which technological progress raises the efficiency of time allocated to education and knowledge and ideology play complementary roles in determining individuals' efficiency units of labor input. A higher supply of aggregate units of efficiency labor generates incentives to invent new technologies because it raises the monopoly rents from the introduction of such technologies. We show that economies with initially "fact-consistent" ideologies are likely to invest more in education and as a result experience faster technological progress and growth. Somewhat paradoxically, we also demonstrate that those economies that start out with relatively more fact-consistent ideologies are the ones likely to experience a weakening support for their ideologies. Support for flexible ideologies that evolve over time remains high even in the long run. When there exists a feedback loop between education and ideology, a flawed ideology may be better for growth and development than no ideology. Finally, the frequency with which ideologies are adopted and spread may be decreasing in the sophistication of technology