Intellectual Property Rights and Economic Development

Over the course of history, different legal instruments for protecting intellectual property have emerged. These instruments differ in their subject matter, extent of protection, and field of application, reflecting society's objective to balance the interests of creators and consumers for different types of intellectual works. These legal instruments are just one of the pieces that form a national system of intellectual property protection. Also crucial to the system's overall effectiveness are the institutions administering these instruments, the mechanisms available for enforcing IPRs, and the rules regarding the treatment of non-nationals.To address some of the issues concerning IPRs, this paper defines what they are and attempts to evaluate the relationship between the protection of intellectual property and economic activity in developing countries. It also summarizes the economic effects of IPRs in terms of creation and diffusion of knowledge and information; and market structure and prices. Furthermore, it discusses the reformation of IPRs regimes and makes recommendations for their administration and enforcement.This paper consolidates some of the research from the 'World Development Report 1998/1999: Knowledge for Development' and some contributions made at an Internet-moderated conference conducted by the Bank's TechNet program. It will be of interest to governments, investors, and international organizations.