What is the best way to reward innovation? While prizes avoid deadweight loss, intellectual property selects high social surplus projects. Optimal innovation policy thus trades off the ex-ante screening benefit and the ex-post distortion. It solves a multidimensional screening problem in the...

The paper's main contribution is to provide a rationale for advocacy. After observing that many organizations (corporations, judiciary, and the executive and legislative branches of government) use competition among enfranchised advocates of special interests to improve policy making, it argues...