Why Increased IP In China And India Is Likely To Disproportionately Benefit The Developed World
from the cui-bono dept
This is the fourth post in a series of posts looking at the question of intellectual property rights in both China and India. We’ll be adding new posts to this series each week for the next few weeks.
India and China face profound, perhaps even existential, economic challenges as they seek to continue providing growth for the hundreds of millions of impoverished citizens who demand economic opportunity and empowerment. As low- and middle-income countries, respectively, the desirability of policies that prove charitable to other countries, especially developed ones, is minimal. Yet, evidence from India shows that intellectual property enhancement involves the transfer of rents from poor countries to rich ones. Although proponents of increased IP believe the process is mutually advantageous, the small absolute market size of developing countries like India and China does not provide adequate incentives to change the level or direction of total R&D expenditure (Dutta & Sharma PDF).
Intellectual property harmonization actually allows foreign rights holders to capture profits, obtain jobs, decrease the balance of payments, and cause dependency (Lanjouw 1997). The anti-competitive, monopolistic nature of intellectual property makes it harder for developing countries to gain access to the most valuable technologies needed for economic convergence (Reichman 1997). One study showed that even if stronger intellectual property could accelerate FDI, it would limit the imitative capability of indigenous firms (Lai 1998). Other work found that there is a strong positive effect of intellectual property on domestic imports, leading to a decrease in the balance of payments (Maskus 1995). Moreover, stronger global IP encourages American exports, something India and China should not necessarily favor (Smith 1999). The world’s most successful economies, such as Japan or the United States, rose to prominence by specifically limiting the scope and breadth of patents (Maskus 2000).
Other posts in this series:
- Do China And India Really Want Stronger Intellectual Property?
- A Brief History Of Intellectual Property In China And India
- Why Might China And India Want To Strengthen National Intellectual Property Policy?
- Why Increased IP In China And India Is Likely To Disproportionately Benefit The Developed World
- In China And India, Stronger Intellectual Property Is Unnecessary
- There Is No Harmony In A Patent Thicket
- The Way Forward On Intellectual Property For China And India