The neoclassical theory of induced technological innovations, pioneered by Hayami and Ruttan, has shown that changes in relative factor prices help explain the bias of technological change. We show in this paper that, when transactions costs on labor and land exist, structural and political factors are additional important determinants of the bias of technology. The size of the research budget, average farm size, and inequality in the distribution of farm sizes are econometrically shown to all add to relative prices in explaining the bias of technology. A larger research budget is, in particular, observed to lead to a bias more congruent with democratic rules of public budget allocation.