Intellectual property rights as development determinants

While intellectual property rights (IPRs) are the key drivers of economic performance in R&D based growth models, they have not been fully explored in empirical development studies. We introduce IPRs to this literature, using Two-Stage Least Squares Bayesian Model Averaging to address endogeneity and model uncertainty at the instrument and income stages. We show that IPRs exert effects similar to `Rule of Law' and therefore provide robust evidence that <i>both</i> physical and intellectual property rights are crucial development determinants. We document that unenforced IPRs exert no effect on development. Instead, it is the level of <i>enforced</i> IPRs that causes development.