It is an empirical fact that low-level income countries manufacture low price commodities, using simple technology, with no investment in Research and Development. This constitutes a poverty trap where it is not advantageous for workers to get further training and poorly educated/trained workers...

To overcome market failures society creates common laws that stimulate or penalize individual actions, the enforcement of which depends on the actions of public authorities who may be susceptible to corruption. We model this behaviour for an autocracy versus a democracy, using a microeconomic...