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24 J. World Trade 75 (1990)
Benefits and Costs of Intellectual Property Protection in Developing Countries

handle is hein.kluwer/jwt0024 and id is 587 raw text is: Benefits and Costs of Intellectual Property Protection in Developing Countries Richard T. RAPP and Richard P. RozEK* I. INTRODUCTION Economic development is a complex process by which countries improve the economic welfare of their citizens and expand their influence in the world. Many treatises have been written on the factors that economists associate with successful development efforts.1 In all modern treatments of the subject, technological change is understood to be an engine of economic development. Economic growth, which means output growing faster than population, requires increases in productivity. Increases in productivity require technological innovation so that a country can produce more output with a given set of resources. Innovation makes it possible for an economy to increase the output of products as well as to develop new products that enhance the quality of life or enable society to produce yet more goods and services. In modern and pre-modern societies, the rate of innovation is subject to economic forces. Innovations do not appear like manna from heaven. Innovations are the result of sustained effort by individuals, either alone or as part of a laboratory or firm, to create new products and better ways to produce existing products. When innovators are allowed to retain rights to the output of innovative effort, they will have the incentive to devote their creative resources to developing innovations. If property rights to potential innovation do not reside with an innovator, the incentive to devote resources to innovation is reduced, and society can expect fewer new products and processes. Proper assignment of these property rights brings forth innovations that provide increased productivity and, thus, economic growth and development. Such property rights are referred to as intellectual property rights and are typically embodied in laws regarding patents, copyrights, trademarks, trade secrets and designs. There is currently a debate in the international arena regarding the degree of intellectual property protection countries should provide. One such dialogue is taking place in the context of the negotiations to broaden the rules of the General Agreement on Tariffs and Trade (GATT). The major issues for participants in the current Uruguay Round of trade talks, which ends in December 1990, include eliminating * President and Senior Consultant, respectively, of National Economic Research Associates, Inc. (NERA), Washington, D.C., U.S.A. Research funding has been provided by the Pharmaceutical Manufacturers Association. The assistance ofJonathan Falk, Yulia Privalova and Lori Nordgulen is gratefully acknowledged. ' A classic work is by S. Kuznets, Modern Economic Growth: Rate, Structure and Spread, Studies in Comparative Economics, vol. 7 (New Haven: Yale University Press, 1966). Copyright © 2007 by Kluwer Law International. All rights reserved. No claim asserted to original government works.

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