Patent Club Convergence Among Nations

INTRODUCTION I. PATENT CLUB CONVERGENCE: THE POSITIVE FRAMEWORK A. Convergence Over Innovation-led Growth B. Coalitions and Convergence Clubs C. Growth Theory and Convergence Over Innovation-led Growth II. THE MODEL A. Methodology B. Findings 1. The Null Hypothesis (H0): Patent Propensity Clusters 2. The First Hypothesis (H1): Inter-Cluster Convergence 3. The Second Hypothesis (H2): Intra-Cluster Convergence III. THEORETICAL RAMIFICATIONS CONCLUSION INTRODUCTION Innovation-related international organs, and primarily the World Trade Organization (WTO), the World Intellectual Property Organization (WIPO) and the United Nations Conference on Trade and Development (UNCTAD), traditionally have been under performed in offering a comprehensive innovation policy for all countries, particularly for developing countries. This issue has been highlighted both before and throughout the establishment of the WTO and the TRIPS Agreement. It was therefore only natural that upon its adoption, TRIPS merely consisted of a flat intellectual property "one-size-fits-all" policy for all WTO-members. In so doing, it implicitly corresponded with an earlier exemplary "Pax-American" World Bank-led neoclassical economic growth approach. Similarly, it should not come as a surprise that the WIPO remains to this day inconsistent in its preferred theoretical setting for innovation-led growth, as witnessed in the organization's archetypical Development Agenda adopted in October 2007, after years of deliberations. As such, only few issue-based coalitions emerged over innovation-led growth or intellectual property-related policies. (1) The exception to the above finding, of course, is the existence of two structural alternatives that remain outside the scope of this article. The first is the loose compilation of civil society groups and movements, including numerous governments and individuals converging over broad egalitarian principles promoted by iconic movements, such as the Access to Knowledge (A2K) or the broad reaching Open Source movement. The second alternative to such issue-based coalitions is a plethora of overly generalized regional coalition blocs, such as the African Group or the European Union. These all-purpose regional blocs fail, however, to account for a more accurate delineation of cherry-picked countries converging over issue-based innovation-led growth or intellectual property-related policies. Nonetheless, de facto heterogeneity among countries over other economic-related growth policies is commonly witnessed in a variety of WTO coalitions. In particular, country coalitions are increasingly becoming the informal preferred response of developing countries to imbalances in power at the WTO. In response to the few under-theorized innovation and intellectual property-related coalitions, this article offers a unique clustering analysis. It does so within the framework of endogenous growth theory, measuring optimal convergence by country coalitions into multiple innovation-based growth equilibria rather than through a single "one-size-fits-all" theoretical setting. The measurement is based on countries' patent propensity rates as proxy for their domestic innovation rates. Convergence literature herein contributes a seminal analytical insight, codenamed club convergence. (2) As the term suggests, club convergence is the hypothesis whereby only countries that are similar in their structural characteristics and which have similar initial conditions will converge with one another. Thus, one potential innovation-led growth hypothesis could be that richer OECD countries may shape one convergence club, the developing countries an additional club, and the underdeveloped yet another. Alternatively, different club convergence groupings may be telling of how countries and groups thereof converge--or ought to--over innovation-led growth and related intellectual property policies. Part I offers a positive theoretical framework based on endogenous growth theory and convergence analysis, briefly introduced above. …