09-01 "Resources, Rules and International Political Economy: The Politics of Development in the WTO"



GDAE Working Paper No. 09-01 Resources, Rules and International Political Economy

position in the international system. Subjecting interaction to institutions gives actors
greater confidence that conflicts will be resolved, if not entirely to their liking at least
according to known and recognized procedures.

Stability and predictability come at a high price, however. To secure developed
countries’ formal commitment to mutually-recognized rules, and thus the bounding of the
uncertainty that is endemic to weakness, developing countries must accept and adapt to
rules and regulations that are generally not of their making. The upshot, then, is that
developing countries may demand and seek to strengthen institutions, even institutions
with unfavourable distributional effects, to secure stability and predictability. The key
point here is that for weak actors, bad rules that are universally acknowledged are better
than no rules, for under conditions marked by power asymmetries no rules
are bad
rules—they are simply less predictable, changing with the whims of the more powerful
actors, and they do not promise reciprocal constraints. This is not to imply that weak
actors do not or should not push for “better” rules, only to make sense of why they may
work to strengthen international arrangements informed by “bad” rules.

The fact that developed and developing countries all share a demand for
institutions, and that the former will tolerate rules that fail to reflect the regnant
distribution of resources as the price of securing compliance, provides developing
countries with possibilities for being exerting unexpected degrees of influence on regime
outcomes, even in issue-areas marked by conflict. That is, developing countries may
exploit the opportunities created by institutions and achieve more favourable outcomes
than they might otherwise be able to secure. However, such a strategy may have
decreasing returns if it destabilizes the institutions by diminishing developed countries’
respect of and support for such institutions.13

In the remainder of this chapter I use these insights to shed light on North-South
conflicts in the WTO over IP and investment.

Politics of Intellectual Property

The management of IP is a critical component of development policy. National
strategies for IP influence trajectories of industrial development and capacities to address
humanitarian concerns. As pillars of national systems of innovation, IP regimes drive
technological change; they affect trajectories of knowledge-creation and knowledge-
diffusion. And by affecting access to technologically-intensive goods, such as
pharmaceuticals, IP regimes contribute to national public health programs.

To understand the fundamental differences in approach toward managing IP, and
hence the underlying conflict in the WTO, a quick review of the issue-area is in order.
When governments create intellectual property rights (IPRs), they are granting actors
rights of exclusion over knowledge and information. National policy responds to two
objectives: encouraging the creation and commercialization of knowledge, and
encouraging the dissemination and use of knowledge. Granting and protecting IPRs can



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