TRIPs and Capability Building in Developing Economies

This paper argues that three major issues need to be addressed when examining the effects of the WTO's TRIPs agreement on capability building in developing economies. First, the agreement looks at seven instruments, which have both common as well as differing implications for capability building in developing economies. Second, four major theoretical arguments address the agreement, i.e. market-oriented, regulation, path-dependent knowledge dynamics and network synergies, and public and basic good characteristics of certain IPRs. Third, the capacity of economies to participate actively in the agreement depends on basic and high tech capabilities. The LIDEs have neither the basic infrastructure to ensure compliance nor the high tech infrastructure to support innovative activities. The Asian NIEs - especially the Republic of Korea - enjoy strong high tech and innovative capabilities. The second-tier NIEs and Latin American NIEs are generally endowed with strong basic infrastructure to strengthen compliance, but lack the high tech infrastructure to support innovative activities. Indeed, The LIDEs on average show higher levels of high tech infrastructure and resident patents than the second-tier NIEs. However, Indonesia and Philippines face serious shortcomings even in basic infrastructure