In this article, we seek to rectify the absence of political analysis characterizing most literature on innovation and development. Although existing research is careful to note the lack of any single recipe or model of innovation, most scholars identify a range of institutions and policies influencing innovative performance. But such explanations beg the question of where institutions, so critical to policy implementation, actually come from. We argue that the answer lies in (1) the desire of political leaders to promote innovation and related institutions, and (2) the structure of political arrangements—especially the number of actors with the power and interest to block or promote reform—through which leaders must operate. We argue that both of these variables are strongly influenced by the threats facing leaders and the resources available to address such threats.