The TRIPS Agreement and Industrial Development

The Trade Related Aspects of Intellectual Property (TRIPS) agreement is an undertaking by members of the World Trade Organisation (WTO) to respect each others’ property rights.  At its inception, its main purpose was to protect the intellectual property rights (IPRs) of Northern firms, who have historically tended to be the main innovators, in Southern markets where imitation was prevalent.  In the Uruguay Round where the WTO was formed, the terms of TRIPS were agreed to as a quid pro quo for easier entry of Southern products into Northern markets.  One of the main concerns that has arisen as a result of TRIPS is the effect on Southern industrial development of tighter intellectual property protection, since imitation by firms in the South that is widely seen as a precursor to innovation has been curtailed by TRIPS. On the other hand, TRIPS proponents argue that stronger IPRs world-wide will not only increase incentives for innovation but also foster industrial development in developing countries by encouraging multinationals to move production there. A key point established in this literature is that the effects of increased IPR protection in the South on the Northern rate of innovation depend critically on whether production shifts to the South via imitation of Northern firms or via North–South FDI. Recent research has produced a unified framework in which Northern innovation, Southern imitation and the North–South flow of FDI respond endogenously to changes in the degree of Southern IPR protection available to Northern firms, wherein the South’s share of the global basket of goods can actually increase with a strengthening of Southern IPR protection. Econometric testing finds some supportive evidence in the data.

Branstetter L., R. Fisman and F. Foley, (2006); “Do stronger intellectual property rights increase international technology transfer? Empirical evidence from U.S. firm-level data.Quarterly Journal of Economics, 121(1): 321–349. [Working paper version]

Branstetter L., R. Fisman, F. Foley and K. Saggi, (2011); “Does intellectual property rights reform spur industrial development?Journal of International Economics, 83(1): 27–36. [Working paper version]

Branstetter L., and K. Saggi, (2011); “Intellectual Property Rights, Foreign Direct Investment and Industrial Development.” Economic Journal, 121(555): 1161–1191. [Working paper version]

Chaudhuri, S., P .Goldberg and P. Jia, (2006); “Estimating the effects of global patent protection in pharmaceuticals: a case study of quinolones in India.” American Economic Review, 96(5): 1477–514. [Working paper version]

Chen, Y. and T. Puttitanun, (2005); “Intellectual Property Rights and Innovation in Developing Countries.” Journal of Development Economics, 78(2): 474–93.

Goldberg P.K., (2010); “Intellectual property rights protection in developing countries: the case of pharmaceuticals.Journal of the European Economic Association, 8(2-3): 326-353. [Working paper version]

Grossman, G.M. and E. Helpman, (1991a); Innovation and Growth in the Global Economy, Cambridge: MIT press.

Grossman, G.M. and E. Helpman, (1991b); “Endogenous product cycles.Economic Journal, vol. 101(3): 1214–29.[Working paper version]

Grossman, G.M. and E. Lai (2004); “International Protection of Intellectual Property.American Economic Review, 94 (5): 1635-53.[Working paper version]

Helpman, E., (1993); “Innovation, imitation, and intellectual property rights.Econometrica, 61(6): 1247–80.[Working paper version]

Ivus, O., (2010); “Do stronger patent rights raise high-tech exports to the developing world? ” Journal of International Economics, 81(1): 38–47. [Working paper version]

Javorcik B., (2004); The composition of foreign direct investment and protection of intellectual property rights in transition economies, European Economic Review, 48(1):39–62. [Working paper version]

Lai, E., (1998); “International intellectual property rights protection and the rate of product innovation.” Journal of Development Economics, 55(1): 133–53.[Working paper version]

The Globalization Paradox Why Global Markets, States, and Democracy Can’t Coexist

“For a century, economists have driven forward the cause of globalization in financial institutions, labour markets, and trade. Yet there have been consistent warning signs that a global economy and free trade might not always be advantageous. Where are the pressure points? What could be done about them?…” [Publisher’s Book Website]

Author’s Book Presentation, August 2012.

Author’s Book Presentation, May 2011.

Author’s Lecture, December 2011.

Reviews / Comments 

Book Review by Kate Saffin in LSE Review of Books, August 2012.

Book Review by Shahid Yusuf in The Development Economics, 50(4), December 2012.

The Lessons From Rodrik’s Globalization Paradox by Antoaneta Dimitrova in Eurosearch, December 2011.

Book Review by Simon Lester in World Trade Review, 10, June 2011.

Book Review by Duncan Green in From Poverty to Power, OXFAM Blog, June 2011.

Book Review by William R. Cline in Peterson Institute for International Economics, May 2011.

Book Review by Steven Pearlstein in The Washington Post, March 2011.

Book Review by Matthew Yglesias in Think Progressive, March 2011.

Book Review by  Richard N. Cooper in Foreign Affairs, February 2011.

Economic Gangsters: Corruption, Violence, and the Poverty of Nations

“Meet the economic gangster. He’s the United Nations diplomat who double-parks his Mercedes on New York City streets at rush hour because the cops can’t touch him–he has diplomatic immunity. He’s the Chinese smuggler who dodges tariffs by magically transforming frozen chickens into frozen turkeys. The dictator, the warlord, the unscrupulous bureaucrat who bilks the developing world of billions in aid. The calculating crook who views stealing and murder as just another part of his business strategy. And, in the wrong set of circumstances, he might just be you…” [Publisher’s Website]

Interview by Edward Miguel, Octomber 2008.

Interview by Raymond Fisman, Nov 2008.

Reviews / Comments

Book Review by Dean Yang in Journal of Economic Literature, 49(3), September 2011.

Book Review by Charles Crawford in British Politics and Policy at LSE Blog, March 2011.

Book Review by Tarcisius Mukuka in Development in Practice, 19(6), July 2009.

Book Reviewby Raghav Gaiha in Development and Change, 40(3), May 2009.

Book Review by David A. Savage in Economic Analysis & Policy, 39(1), MARCH 2009.

Book Reviewby Susanne Karstedt in Times Higher Education, February 2009.

Book Review by Steven Poole in The Guardian, November 2008.


Reforming the World Trading System to Better Integrate Developing Countries

Ever since the conclusion of the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) in 1994, there has been a growing sense that the GATT, and the World Trade Organisation (WTO) that has superseded it, favours the interests of developed countries.  In response to this, a line of research has developed to investigate possible reforms to the world trading system (the set of rules that forms the basis of the GATT/WTO) so that it better represents the interests of developing countries as well.

Bagwell K., Mavroidis, P. and R. Staiger (2007); “Auctioning Countermeasures in the WTO.Journal of International Economics, 73(2), 309-332. [Working paper version]

Bronckers M. and N. Van Den Broek (2005); “Financial Compensation in the WTO: Improving the Remedies of WTO Dispute Settlement.Journal of International Economic Law, 8, 101-126.

Limão N. and K. Saggi (2008); “Tariff Retaliation versus Financial Compensation in the Enforcement of International Trade Agreements.Journal of International Economics 76(1), 48-60. [Working paper version]

Limão N. and K. Saggi (2013); “Size Inequality, Coordination Externalities and International Trade Agreements.” 63: 10-27. [Working paper version]

Schott J. (2009); “America, Europe, and the New Trade Order.Business and Politics, 11(3), 1-22.

Srinivasan T. N. (1999); “Developing Countries in the World Trading System: From GATT, 1947, to the Third Ministerial Meeting of WTO.The World Economy, 22 (8), 1047 – 1064. [Working paper version]

Zissimos B. (2009); “Optimum tariffs and retaliation: How country numbers matter.” Journal of International Economics, 78(2), 276-286. [Working paper version]

One Economics, Many Recipes: Globalization, Institutions, and Economic Growth

“In One Economics, Many Recipes, leading economist Dani Rodrik argues that neither globalizers nor antiglobalizers have got it right. While economic globalization can be a boon for countries that are trying to dig out of poverty, success usually requires following policies that are tailored to local economic and political realities rather than obeying the dictates of the international globalization establishment. A definitive statement of Rodrik’s original and influential perspective on economic growth and globalization, One Economics, Many Recipes shows how successful countries craft their own unique strategies–and what other countries can learn from them…” [Publisher ‘s Book Website]

Author’s Interview, IMF, November 2007.

Reviews / Comments

Book review by Mukti Upadhyay in Journal of International and Global Studies, 1(2), April 2010.

Book review by Andrés Rodríguez-Clare in Journal of International Economics, 77(1), February 2009. [Earlier version]

Book review by Jonathan Temple in The Economic Journal 119(535), February 2009.

Book Review by Robert C. Feenstra in The Economic Journal, 119(535), February 2009.

Book review by Declan Trott in Agenda, 15(1), November 2008.

Book review by Robert E. Baldwin, World Trade Review, 7(3), July 2008.

Book review by Christian Kellermann, Rezensionen/Book Reviews, April 2008.

Book review by Richard N. Cooper in Foreign Affairs, March/April 2008.

A Crooked Timber Seminar on Dani Rodrik’s Book edited by Henry Farrell, 2007.

Book review by Piaw Na in Piaw’s Blog, December 2007.

A discussion of Dani Rodrik’s book by Gregory Sanders, November 2007.

Pillars of Prosperity: The Political Economics of Development Clusters

“Little else is required to carry a state to the highest degree of opulence from the lowest barbarism, but peace, easy taxes, and a tolerable administration of justice; all the rest being brought about by the natural course of things.” So wrote Adam Smith a quarter of a millennium ago. Using the tools of modern political economics and combining economic theory with a bird’s-eye view of the data, this book reinterprets Smith’s pillars of prosperity to explain the existence of development clusters–places that tend to combine effective state institutions, the absence of political violence, and high per-capita incomes…” [Publisher’s Book Webpage]

Authors’ Book website

Reviews / Comments

Book review by Moses K. Kihiko in Progress in Development Studies, 13(2), April 2013.

Book review by Tuuli Ylinen in Journal of International Development, 25(3), April 2013.

Book review by Bentley MacLeod in Journal of Economic Literature, 51(1), March 2013. [Earlier version]

Book Review by Colin Jennings in European Journal of Political Economy, 29, March 2013.

Book Review by Claudia Williamson in Public Choice, 153 (1/2), October 2012.

Book Review by Daniel W. Bromley in American Journal of Agricultural Economics, November 2011.

Talk notes for LSE Book Launch by Robert H. Wade, November 2011.

“Building an effective state” by The Enlightened Economist, October 2011.

Behind the Scenes at the WTO: The Real World of International Trade Negotiations

<style=”font-size: 14px;”>”World hunger, jobs, the overall economic prospects of developing and developed countries alike are all being shaped more and more by the international negotiations about trade, agriculture, services, investment and intellectual property rights going on at the World Trade Organization (WTO). Based on interviews with people actually participating in the negotiations, this remarkable book lifts the shroud of secrecy surrounding these ostensibly democratic negotiations…”[Publisher’s Book Website]

Reviews / Comments

Book review by Robert Staiger in Journal of Economic Literature, 44(2), June 2006. [Earlier version]

The High Stakes of WTO Reform by James Thuo Gathii in Michigan Law Review, 104(6), May 2006.

Book review by Bobby Tuazon in Bulatlat, IV(1),February 2004.

Book review by Gerard Downes in International Affairs, 80(4), September 2004.

Book review by Jeremy Agar in Foreign Control Watchdog, 104, December 2003.

Globalization, Intermediaries and Rural Development.

It is understood that intermediaries are an important bridge between supply of and demand for agricultural products.  In many cases they identify buyers in foreign markets.  It is apparent that their activity has direct effects on the welfare and efficiency of local producers.  Whether or not these effects are positive depends on intermediaries’ bargaining power, producers’ decisions about verticalization and/or the institutional environment of the home country, including state and legal capacities.  Globalization has the potential to magnify these effects.

Antràs P.and A. Costinot, (2011); “Intermediated Trade.The Quarterly Journal of Economics, 126(3): 1319-1374. [Earlier version]

Bardhan P., D. Mookherjee and M. Tsumagari, (2012);”Middleman Margins and Globalization.” American Economic Journal: Microeconomics, forthcoming. [Earlier version]

Fafchamps M., E. Gabre-Madhin and M. Bart, (2005); “Increasing returns and market efficiency in agricultural trade.” Journal of Development Economics, 78(2): 406-442. [Earlier version]

Fafchamps M. and R. V. Hill, (2008); “Price Transmission and Trader Entry in Domestic Commodity Markets.” Economic Development and Cultural Change, 56(4): 729-766. [Earlier version]

Krishna K. and Y. Sheveleva, (2012); “Wheat or Strawberries? Intermediated Trade with Limited Contracting.” Working Paper.

Why Nations Fail: The Origins of Power, Prosperity, and Poverty

“Brilliant and engagingly written, Why Nations Fail answers the question that has stumped the experts for centuries: Why are some nations rich and others poor, divided by wealth and poverty, health and sickness, food and famine?

Is it culture, the weather, geography? Perhaps ignorance of what the right policies are?

Simply, no. None of these factors is either definitive or destiny. Otherwise, how to explain why Botswana has become one of the fastest growing countries in the world, while other African nations, such as Zimbabwe, the Congo, and Sierra Leone, are mired in poverty and violence?…” [Publisher’s book website]

Author’s Book Website 

Author’s Interview, The Economist, March 2012.

Reviews / Comments 

Book review by Bill Gates, February 2013.
(Authors Reply, March 2013 )

Book review by Duncan Green in The World Bank Group, December 2012.

Government, Geography, and Growth by Jeffrey Sachs in Foreign Affairs, October 2012.
(Authors Reply, November 2012)

Which Nations Failed? by Arvind Subramanian in The American Interest, October 2012.
(Authors Reply, November 2012)

Book review by Michele Boldrin, David K. Levine and Salvatore Modica, September 2012.

Book review by Junet Hunter in LSE Blogs, EUROPP, August 2012.

What Makes Countries Rich or Poor? by Jared Diamond in The New York Review of Books, June 2012.
(Authors Reply, August 2012)

Book review by Peter Coy in Bloomberg Businessweek, April 2012.

Book review by Warren Bass in The Washington Post, April 2012.

Book review by Nancy Birdsall in IMF, March 2012

The Big Why by The Economist, March 2012.

The Povetry of Nations by Dalibor Rohac in The Wall Street Journal, March 2012.

The Roots of Hardship by William Easterly in The Wall Street Journal, March 2012.

Book review by Paul Collier in The Observer March 2012.

The Wealth of Nations by Martin Wolf in The Financial Times, March 2012.

Are Natural Resources a Curse for Developing Countries?

Paradoxically, for developing countries the abundance of natural resources can be a curse. With the lack of property rights protection and rule of law, natural resource abundance contributes to political instability, conflict, and corruption. From the perspective of international trade they can cause the so called ‘Dutch disease,’ whereby a natural resource discovery triggers exchange rate appreciation, and its adverse consequences for industrialization and growth. In addition, price volatility in world markets creates macroeconomic instability for resource exporters. Currently international institutions, the WTO in particular, do not have the adequate apparatus to foster trade agreements that cover natural resources; such agreements could potentially lead to more efficient outcomes.

Collier P. and A. J. Venables, (2011); “Illusory Revenues: Import tariffs in Resource-Rich and Aid-Rich Economies.” Journal of Development Economics, 94(2): 202-206. [Earlier version]

Giordanni P. E., N. Rocha and M. Ruta, (2012); “Food Prices and the Multiplier Effect of Export Policy.” World Trade Organization Working Paper no. ERSD-2012-08.

Ruta M. and A. J. Venables, (2012); “International Trade in Natural Resources.” Annual Review of Resource Economics, 4: 331-352. [Earlier version]

Van der Ploeg F., (2011); “Natural Resources:Curse or Blessing?” Journal of Economic Literature, 49(2): 366-420. [Earlier version]