Distributive Politics and Economic Growth

C.E.P.R. Discussion Papers, CEPR Discussion Papers 01/1991; 109(565).
Source: RePEc


This paper provides a survey on studies that analyze the macroeconomic effects of intellectual property rights (IPR). The first part of this paper introduces different patent policy instruments and reviews their effects on R&D and economic growth. This part also discusses the distortionary effects and distributional consequences of IPR protection as well as empirical evidence on the effects of patent rights. Then, the second part considers the international aspects of IPR protection. In summary, this paper draws the following conclusions from the literature. Firstly, different patent policy instruments have different effects on R&D and growth. Secondly, there is empirical evidence supporting a positive relationship between IPR protection and innovation, but the evidence is stronger for developed countries than for developing countries. Thirdly, the optimal level of IPR protection should tradeoff the social benefits of enhanced innovation against the social costs of multiple distortions and income inequality. Finally, in an open economy, achieving the globally optimal level of protection requires an international coordination (rather than the harmonization) of IPR protection.

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    • "Hence, autocratic rulers are in a better position to implement these kinds of measures which are unpopular but required for the development of economy. Secondly, it is argued that under democratic regimes the redistribution of the resources from productive investment and development expenditures towards social welfare, due to populist pressure, hinders economic growth (Alesina and Rodrik, 1994;Persson and Tabellini, 1994;Barro, 2000;Haggard, 1990). This argument is better justified in least developed countries (LDCs) where development spending on infrastructure, technology, development of financial markets etc is inevitable for economic growth despite low levels of social welfare. "
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    • "In this context, the Downsian paradigm predicts that whenever the median income lies below the mean income, the median voter will be able to influence the tax system and the expenditure programs in such a way as to redistribute resources in her own favor, but even in this case recent empirical analyses have started to disconfirm this explanation. Empirical studies of the link between income (re)distribution and economic growth (Persson and Tabellini 1994; Alesina and Rodrik 1994; Perotti 1996; Milanovic 2000) based on a median voter approach have generally pointed out that, in the long run, more unequal distributions of income are persistently associated with poorer, not richer median voters. Some evidence is found that the median voter is able to obtain comparatively larger amounts of redistribution, but these processes do not reduce income inequality; rather they depress investments and economic growth. "
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    • "low Alesina and Rodrik (1994) "
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    ABSTRACT: This article analyses the impact of the electoral calendar on the composition of tax revenue (direct versus indirect taxes). It thus represents an extension of traditional political budget-cycle analyses assessing the impact of elections on overall revenue. Panel data from 56 developing countries over the 1980-2006 period reveals a clear pattern of electorally-related policy interventions. Taking the potential endogeneity of election timing into account, we find robust evidence of lower indirect taxes being applied by incumbent governments in the period just prior to an election. Indirect tax revenue in election years is estimated to be 0.3 GDP percentage points lower than in other years, corresponding to a fall of about 3.4% of the average figure in the sample countries, while there is no such relationship with direct tax revenue.
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