  Political systems shape institutions and govern institutional change
supporting economic performance, production and diffusion of technological
innovation. This study shows, using global data of countries, that
institutional change, based on a progressive democratization of countries, is a
driving force of inventions, adoption and diffusion of innovations in society.
The relation between technological innovation and level of democracy can be
explained with following factors: higher economic freedom in society, effective
regulation, higher economic and political stability, higher investments in R&D
and higher education, good economic governance and higher level of education
system for training high-skilled human resources. Overall, then, the positive
associations between institutional change, based on a process of
democratization, and paths of technological innovation can sustain best
practices of political economy for the development of economies in the presence
of globalization and geographical expansion of markets.

General Economics;Economics