Trade, Tragedy, and the Commons

B. Copeland and M. Scott Taylor

American Economic Review, Vol. 99, No. 3, June 2009, 725-749.

We develop a theory of resource management where the degree to which countries escape the tragedy of the commons, and hence the de facto property rights regime, is endogenously determined. Three forces determine success or failure in resource management: the regulator’s enforcement power, the extent of harvesting capacity, and the ability of the resource to generate competitive returns without being extinguished. The model can explain heterogeneity across countries and resources in the effectiveness of resource management, and it predicts that changes in prices, population, and technology can cause transitions to better or worse management regimes.

International Trade between Consumer and Conservationist Countries

J. Brander and M. Scott Taylor

Resource and Energy Economics, Vol. 19, No. 4, November 1997, 267-297.

We consider trade between a 'consumer' country with an open access renewable resource and a 'conservationist' country that regulates resource harvesting to maximize domestic steady-state utility. In what we call the mild overuse case, the consumer country exports the resource good and suffers steady-state losses from trade, as suggested by the conventional wisdom that weak resource management standards confer a competitive advantage on domestic firms in the resource sector but cause welfare losses. Strikingly, however, when the resource stock is most in jeopardy, the conservationist country exports the resource good in steady state and both countries experience gains from trade.

TRIPS, Trade, and Growth

M. Scott Taylor

International Economic Review, Vol. 35, No. 2, May 1994, 361-381.

A two-country model of endogenous growth is employed to assess the importance of intellectual property rights to trade, growth, and technology transfer. The paper provides theoretical results linking the intellectual property rights regime to trade patterns, aggregate R&D, worldwide growth, and aggregate welfare measures. Failure to provide patent protection for foreign-made innovations forces innovators to employ less than the best practice research technologies, reduces aggregate R&D activities worldwide, effectively eliminates technology transfer across countries, and reduces worldwide growth.

TRIPS, Trade, and Technology Transfer

M. Scott Taylor

Canadian Journal of Economics, Vol. 26, No. 3, August 1993, 625-637.

A north-south model of unintentional technology transfer is developed where the stringency of southern patent protection provides the institutional backdrop for a strategic game in a high-tech goods market. The appropriability regime is set endogenously and combines elements of imperfect southern patent protection with the protection afforded by market-made northern technology `masquing.' Les stringent protection of northern intellectual property can `work' much like other strategic trade policies; therefore, developed countries appear to be right in demanding discussion of intellectual property rights in GATT.