A Governance Framework for Intellectual Property Rights
Chapter 2: Information paradox and public goods
Welfare economics concerns weighing up the costs and benefits – private and public – inherent within the economic system. One way of engaging with this equation is to apply what Pigou referred to as a social net product analysis. This analysis is particularly useful when applied to the market failures inherent within the information environment. Doing so draws out costs that might otherwise be obscured when using a pure neoclassical economic market analysis. The social net product equation will be explained more fully in the next chapter. For now it can simply be thought of as a type of cost-benefit analysis that takes into account private and public costs and benefits. The chapter begins by discussing the nexus between property and markets from a welfare economics perspective. This will be followed by a discussion of the information paradox, which gives rise to efficiency costs. The public goods provisioning problem, and the accompanying administration costs of propertisation will follow. We will begin to see in this chapter that although there are several options available when seeking to overcome market failure (e.g. state- or social-based production), propertisation has come to dominate. This domination is a corollary of ignoring, concealing or understating the costs of property. By revealing certain categories of costs associated with property, this chapter prepares the way for the post-Part I exploration of alternate information environmental governance options.
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