Intellectual Property Rights, Endogenous Growth and Welfare in a North-South Model

The issue of Intellectual Property Rights (IPRs) in the North-South context has been the subject of some controversy. The question that has been raised is whether a stronger IPR regime is bene ̄cial or harmful for the South. While a stronger IPR enforcement can increase innovation in the North, it reduces the rate of adoption of new technology by the South. This paper attempts to address this issue with the help of a North-South general equilibrium model of endogenous growth. The model is solved numerically for reasonable parameter values.The main result of the paper is that the South always loses (and the North always gains) from a stronger IPR regime. This suggests that in the absence of adequate compensation schemes there will be a genuine con°ict of interest between the North and the South over this issue. I would like to thank Alan Deardor® and Susanto Basu for detailed comments and suggestions. I am also grateful to seminar participants of the Emory Economics department for helpful discussion. All errors are my own.