COMPARACIÓN CON DATOS DE LA REGISTRADURÍA NACIONAL

Recently, intellectual property rights made it on the agenda of international trade ne- gotiations as well as of the academic literature on international trade. Although there have been treaties that dealt with intellectual property rights since the end of 19th century, it attained a heightened interest in the last years. Intellectual property be- came an increasingly important part of national production and international trade.3

Developed economies, however, expressed concerns that the protection of intellectual property rights is insu¢ cient in developing countries. If producers see their products

copied in developing countries, they will not only see their pro…ts decrease, but might also refrain from further research and development activities. At the same time devel- oping countries mentioned high social costs of enforcing developed economies property rights standard in their markets. This is particularly true when it comes to medicines. After ongoing discussions an intermediate agreement was reached with the TRIPS treaty in 1994. Although it was signed with unanimity, it came under critique right from its very beginning. Some developing countries and non-governmental organiza- tions denounced it as an instrument of neo-imperialistic policies that will come at a high cost (both in monetary and social terms) to poorer countries. Granting patents for medicines against diseases such as HIV, malaria or cholera - so the argument goes - will make these medicines una¤ordable for the large majority of people in developing countries and cause a widespread and despicable su¤ering there, whereas the addi- tional pro…ts of the pharmaceutical industry will be negligible compared to the rest of their total revenue.4 Still, lobbyists of the pharmaceutical industry claim that these arguments are highly exaggerated and deliberately misleading. Due to price discrim- ination in di¤erent markets prices will not rise by a large amount, but the protection is needed to give security to pharmaceutical producers. Further, the demand structure for medicines is di¤erent in third world countries compared to developed countries. The demand for medicines against malaria is too small in developed countries to guar- antee a su¢ ciently high investment in this market segment. Diwan and Rodrik (1989) substantiate this claim in a model. The widespread disagreement over the protection of intellectual property rights suggests that di¤erent countries and di¤erent groups within countries have divergent interests and that their politicians face very di¤erent incen- tives when they negotiate over intellectual property rights. This paper analyses what kind of agreements one can expect from biased politicians with well de…ned objective functions.

Although there is a rich literature that deals with the incentive e¤ects patents have on the innovative activity in a closed economy, there is only a small literature that looks at the issue in open economies. Closed economy models of patents consider a social planner that wants to maximize domestic welfare over an in…nite horizon. By granting a certain patent length, he will induce innovative activity. This, of course, comes at the prize of less consumer surplus, as by granting a patent the social planner suppresses competition on a potentially competitive market. In general, the politician’s trade-o¤ will have an interior solution that will imply a …nite length of patent protection.5

4_{See Chaudhuri (2004) for a detailed examination of this argument.} 5_{An exception is Gilbert and Shapiro (1990).}

Things might be more complicated in an open economy. The …rst paper to address this question is Deardor¤ (1994). Deardor¤ considers a world that is partitioned into a North that can engage in research and development activities and a South that cannot. Taking as a reference point a situation in which only the developed North has protection of property rights, he asks about the welfare e¤ects of extending the North’s property rights regime to the South. Deardor¤ is able to show that the welfare e¤ects are ambiguous as they depend on the relative size of the South. Although he considers the welfare e¤ects of di¤erent patent policies, he does not specify objective functions of governments. The analysis is only concerned with welfare and policies are rather described as exogenous shocks to an economic system.

Grossman and Lee (2005) go one step further and specify a dynamic general equi- librium model with two countries which can be taken again for North and South. Both countries are ruled by politicians that want to maximize national welfare over an in- …nite horizon. They do so by choosing a certain strength of patent protection that includes the time of protection as well as strength of it. Finally they derive a Nash equilibrium in patent protection, that has the following properties:

- In general, patent protection is too low in a world economy that consists of het- erogeneous countries.

- The size of the ine¢ ciency depends on the relative size of both countries.

- Global harmonization is neither a necessary nor a su¢ cient condition for global e¢ ciency.

Despite the analytical complexity of the model the welfare properties of the coop- erative and non-cooperative equilibria depend to a large degree on the inter-country external e¤ect: a national policymaker does not take into account that an additional time unit of patent length will increase the probability of innovation not only for his home country, but will also generate bene…ts for the other country as well.