Frederick M. Abbott
in Benoliel D, Yu PK, Gurry F, Lee K, eds. Intellectual Property, Innovation and Economic Inequality, pp. 305-323. Cambridge University Press; 2024.
This book chapter was written in June 2020, subsequently updated.
Abstract
There are a variety of factors that perpetuate economic disparity. Among these is a disparity in levels of technological development. Successful industrial policy is not only a matter of access to technology. Access to capital, infrastructure development, education and training, design of social welfare systems, and other factors are important to economic development and welfare. Whether a particular form of government is a strong determinant of successful economic development is an open question. In recent years, some autocratically governed countries employing substantial state intervention in economic activity have performed well in economic development metrics. The Western liberal idea that democracy and economic progress are necessarily linked has been challenged.
While technology is not the sole determinant of economic development, it is an important determinant because the efficiency of national industry and the international competitiveness of economies are dependent on the capacity to develop and implement technical solutions. The question addressed in this chapter is how the recent trend toward “economic nationalism” that employs managed trade relations to pursue strategic interests may affect the ability of low- and middle-income countries (LMICs) to develop and implement new technologies, potentially resulting in a deterioration of the relative economic performance of LMICs vis-à-vis the dominant national or regional economies. If deterioration is a realistic prospect, are there policy measures LMICs may take to protect against that?
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