| Summary: | This article addresses three critical issues involving the WTO's TRIPs agreement on capability building in developing economies. First, the agreement looks at seven instruments, which have both common as well as differing implications for capability building in developing economies. Second, four major theoretical arguments address the agreement, i.e. market-driven, regulation, path-dependent knowledge dynamics and network synergies, and basic good characteristics of certain products. Because the capacity to appropriate benefits from the agreement depends on basic and high tech capabilities, it could bring unequal consequences globally, the third issue relates to the state of relative basic and high tech infrastructure of developing economies. The LIDEs have neither the basic infrastructure to ensure compliance nor the high tech infrastructure to support innovative activities. The Asian NIEs — especially the Republic of Korea — enjoy strong high tech and innovative capabilities. Most second-tier NIEs and Latin American NIEs are generally endowed with strong basic infrastructure to strengthen compliance, but lack the high tech infrastructure to support innovative activities. The second-tier NIEs of Indonesia and Philippines face serious shortcomings even in basic infrastructure. Indeed, The LIDEs on average show higher levels of high tech infrastructure and resident patents than the second-tier NIEs.} Reprinted by permission of the publisher.
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