The Political Economy of Intellectural Property Protection: the Case of Software

The end of the 20 Century was marked by a sea change in global governance in the realm of intellectual property rights (IPRs). Whereas countries historically retained substantial autonomy in this policy domain, the 1990s witnessed the establishment of new global obligations regarding national practices for the treatment of intellectual property. This paper focuses on the case of software “piracy” to assess the mechanisms by which the new global obligations for the treatment of intellectual property are transmitted from the international to the national levels. We first consider a set of national-level factors that many scholars have shown to affect IPP. We then supplement the standard emphasis on domestic factors with an analysis of new transnational factors: countries’ multilateral obligations under the World Trade Organization’s IPRs provisions; and bilateral pressures from the United States to increase the protection of IPRs. Population averaged panel data models are used to assess the effects of these national and transnational determinants on levels of software piracy in 80 countries from 1994-2002. Our results indicate that membership in the WTO and bilateral pressures from the US – particularly pressures that offer reciprocal concessions – lead to substantial increases in levels of protection in rich and poor countries. There is, in short, a new international political economy of IPRs. The Political Economy of Intellectual Property Protection: The Case of Software The end of the 20 Century was marked by a sea change in global governance in the realm of intellectual property rights (IPRs). Whereas countries historically retained substantial autonomy in this policy domain, the 1990s witnessed the establishment of new global norms regarding national practices for the treatment of intellectual property. At the heart of these changes were the introduction of the World Trade Organization’s (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), a binding international agreement that sets new universal standards for how countries grant and protect IPRs, and the increased attention given to IPRs in the foreign policy of the United States. The new standards stipulated by TRIPS and the new practices demanded by the US require countries to increase significantly the range of products and processes that qualify for protection as “intellectual property” and also to increase considerably the extent of protection provided for such products and processes. This paper assesses the mechanisms by which the new global obligations for the treatment of intellectual property are transmitted from the international to the national levels. To be sure, as IPRs have gained increased prominence on the international economic agenda, rich and poor countries alike have responded by reforming their copyright, patent, and trademark legislation, introducing new legislation, and creating new administrative and judicial institutions to facilitate the enforcement of these new rights. In so doing, most countries have brought their IPR regimes into conformity with—and at times exceeded—the standards required by TRIPS. Yet countries with similar laws and institutions can – and do – continue to demonstrate remarkably different practices with regard to IPRs. New international obligations and external pressures may usher in For explanations of this sea change in global regulation, see, among others, Drahos (1995, 1997); May (2000); Ryan (1998); Sell (1998, 2003); Sell and May (2001).