Intellectual Property for Economic Development

Intellectual Property for Economic Development

KDI series in Economic Policy and Development

Edited by Sanghoon Ahn, Bronwyn H. Hall and Keun Lee

Protection of intellectual property rights (IPRs) serves a dual role in economic development. While it promotes innovation by providing legal protection of inventions, it may retard catch-up and learning by restricting the diffusion of innovations. Does stronger IPR protection in a developing country encourage technology development in or technology transfer to that country? This book aims to address the issue, covering diverse forms of IPRs, diverse actors in innovation, and diverse cases from Asia and Latin America.

Chapter 2: Does patent protection help or hinder technology transfer?

Bronwyn H. Hall

Subjects: economics and finance, development economics, intellectual property, law and economics, innovation and technology, intellectual property


The question posed by the title to this chapter is in some ways an old one that has been studied by a large number of economists, going back at least to Mansfield’s pioneering survey work on the question. Recent interest in the topic has been reinvigorated by the adoption of the TRIPS agreement and an increased interest in innovative activities as a driver of economic development. The justification for the present survey is that evidence on Intellectual Property Rights (IPRs) and technology transfer has been accumulating recently and it seemed worthwhile to have another look at the topic, especially as this relationship pertains to developing and emerging economies. In the past, study of this question has not led to clear and unambiguous conclusions. The recent introduction of the TRIPS agreement at the WTO has meant some harmonization of patent rights worldwide, largely in the direction of strengthening them in developing countries, and many economists (and others) have critiqued this step as negative rather than positive for the economic development of these countries. If a conclusion were to be drawn, the available evidence suggests that “one-size-fits-all” harmonization of patent rights and IPRs in general is not welfare-enhancing for less developed countries, and possibly not even for developed countries. This chapter reviews the economic evidence on the IP-tech transfer-development relationship and then suggests some areas for further research.

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