ABSTRACT

Global trade and investment have become increasingly liberalized in recent decades. This liberalization has lately been accompanied by substantive new requirements for strong minimum standards of intellectual property (IP) protection, which moves the world economy toward harmonized private rights in knowledge goods. While this trend may have beneficial impacts in terms of innovation and technology diffusion, such impacts would not be evenly distributed across countries. Deep questions also arise about whether such globalization of rights to information will raise roadblocks to the national and international provision of such public goods as environmental protection, public health, education, and scientific advance. This chapter argues that the globalized IP regime will strongly affect prospects for technology transfer and competition in developing countries. In turn, these nations must determine how to implement such standards in a pro-competitive manner and how to foster innovation and competition in their own markets. Developing countries may need to take the lead in policy experimentation and IP innovation in order to offset overly protectionist tendencies in the rich countries and to maintain the supply of global public goods in an emerging transnational system of innovation.

Introduction and conceptual framework

Economists studying international trade remain optimistic about the ability of liberal trade policies and integration into the global economy to encourage growth and raise people in poor countries out of poverty.