Department of Economics

Intellectual property treaties have two main types of provisions: national treatment of foreign inventors, and harmonization of protections. I characterize the circumstances in which countries would want to treat foreign inventors the same as national inventors. I then argue that national treatment of foreign inventors leads to stronger intellectual property protection than is optimal, and that this effect is exacerbated when protections must be harmonized. However levels of public and private R&D spending will be lower than if each country took account of the uncompensated externalities that its R&D spending confers on other countries. The stronger protection engendered by attempts at harmonization are a partial remedy.