The stability of coerced economic reform : the case of IPR

Abstract

Theories in international relations posit, and empirical evidence has verified, that unwilling states can be compelled by another state or by an international institution to enact domestic policy reform. However, these theories ignore the important follow-on question of whether such externally imposed reforms can be expected to stick. Using intellectual property rights (IPR) reform as a policy case, this dissertation seeks to explain why imposed reform stabilizes in some states but not in others. Here, stable policy means a government demonstrates credible and ongoing commitment to the reform after enacting new law. For example, the state passes additional legal measures to extend the reform, and provides ample support for domestic institutions necessary for the law's implementation. This dissertation presents a comparative study of IPR reform in Brazil and South Korea, covering seven years in the former case and sixteen years in the latter. The Korean government acquiesced to U.S. pressure in 1987 and strengthened its national IPR regime. Brazil undertook IPR reform in 1996, owing in part to its obligation to abide by the directives of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Accord).

(cont.) The argument put forward is that states commit to imposed reforms once they capture or create reform benefits, and that it is the state itself, not interest groups, that is the principal architect of domestic policy reform. Though states often yield to external pressure and enact policy reform, they are conceding formal compliance (via ratification) but may be feigning functional compliance (i.e., on-the-ground enforcement). In short, the decision to commit to, or backtrack on, imposed reform is made after enactment. Relative gains concerns figure prominently in a state's calculation of what to do post-ratification. Given that the welfare effects of IPR reform are zero-sum in the short term and indeterminate in the long term, states will backtrack on IPR reform to avoid absorbing the concomitant welfare losses. If the state is able to turn unwanted reform to national advantage, then the state commits and the policy stabilizes despite the fact that the reform lacks widespread local acceptance. Principally an empirical study, this research adds needed depth to the current literature on IPR reform in emerging economies.