The economic impact of intellectual property rights: An overview and guide

This paper, adapted from a conference presentation in Venice, links the history of intellectual property protection to two important trends in this field: (1) the shifting baseline, from a presumption of no property rights and open competition, to the presumption that all intellectual effort deserves the award of a property right; and (2) growing awareness of the political economy of these rights, which legislators can create and strengthen with little direct effect on government budgets. The paper also considers a shift in the scholarly emphasis, from the brand question of the overall worth of intellectual property to defailed consideration of individual doctrines and rules.     

Federal support of basic research: Some economic issues

Summary There is no necessary connection between leadership in basic science and leadership in the applications of science, because scientific progress is a cooperative endeavour and not a competitive game; indeed, there may be a conflict between basic research and applied science. The notion of a position of leadership; in science raises questions of what leadership consists in and what its value is to the nation. The two main arguments for government support of science are cultural-social, and economic. The cultural-social argument stresses scientific activity as a form of social consumption of wealth and raises the question of whether other uses of the resources employed would contribute more to the greatness of the society. The economic argument stresses basic scientific research as a form of investment for the future, and raises the questions of what the rate of return on such investment is and whether and to what extent government support is called for. Relevant economic research results bearing on this problem are scarce. Economic theory suggests that competition in the market will supply less than the optimal amount of basic research; but our society substantially supplements the market through private contributions to and government support of science, and the question is whether this supplementation is deficient or excessive. Here difficult problems arise, on which more economic research is needed; one of these concerns the relative merits of government and private support of science. The rule-of-thumb procedures generally recommended for determining the volume and allocation of government support to basic scientific research generally ignore these problems, and amount to endorsing the present level of government support or recommending that it be increased. Allocation of federal support of science should take account of the possibility of stimulating the economic development of poor regions of the country by locating scientific research facilities in them.     

Superstar effects on royalty income in a performing rights organization

This paper examines the economic accomplishments of individual members in a Performing Rights Organization (PRO), sometimes referred to as a Performing Rights Society. Today, there is the growing importance of intellectual property and copyright protection for authors and creators of literary, dramatic, musical, artistic and other intellectual works. The digital age has placed added pressure on songwriters, lyricists and composers in their ability to derive economic benefits from their intellectual creativity in the form of a copyright. Copyright laws protect and enable the creation of music by allowing authors and composers to license the control and use of their creations, and receive compensation in the form of royalty payments for their work. The PROs license, collect and distribute royalty payments for non-dramatic public performances of copyrighted musical works created and owned by its members or affiliates. In this paper, skewness and heavy tail of returns in the form of member royalty payments are estimated using the skew-normal and skew-t distributions in a parametric approach. We found strong evidence of the so-called ‘superstar effect’ in which the average royalty payment made by a PRO is still dominated by extreme outcomes, and relatively few members earned a substantial share of royalty payments from blockbuster hits that have endured over time. There is little evidence of smaller niche members dominating or replacing the ‘superstars.’ Economists and others will benefit from this empirical study which emphasizes a new understanding of the music industry from a PRO, member royalty payment and performance copyright perspective.     

Evaluating the effects of direct support on the economic situation of artists

The paper deals with the relationship between direct public support for artists and the economic situation of artists. The empirical findings stem from a research project on the situation of artists in Finland. Some problems connected with obtaining relevant data on artists' economic situation are presented. The effects of direct financial support granted to individual artists on their income level and income discrepancies are illustrated with different patterns of impact. A brief presentation of the goals and measures of public policy towards artists in Finland is given, and the relationship with policy objectives and income effects of direct artists support is discussed. Two issues relevant for evaluating artist policy are raised: the need to account for the fundamental differences between art fields and artistic occupations, and the need to study the actual functions grant income has for the artists.     

On the construction of property rights in aesthetic ideas

The paper attempts to formulate concrete proposals for a change in laws of intellectual property, based on a communication-oriented theoretical analysis of the issue. The particular role of collection societies is investigated. The proposals arrived at suggest a strengthening of non-negotiable, non-hereditary authors' rights, and a refinancing fee collected for copies of works of art with classical status and distributed to members of currently active art circles.     

The appropriate extent of intellectual property rights in art

The paper examines whether intellectual property rights in art should be extended to the entire world. In earlier papers, the economics of patent rights have been examined and the argument made that world welfare is likely to fall if patent rights are extended to the entire world. This argument is recapitulated here with special attention to the assumptions that are needed for its validity. These assumptions are then reexamined in the context of markets for art to see whether the argument carries over. It is found that while most of the assumptions do carry over well enough to justify the argument, there are also certain circumstances that may require greater geographic extension of intellectual property rights in some cases.Paper prepared for a conference on The Economics of Intellectual Property Rights, International Center for Art Economics, University of Venice, October 6–8, 1994.     

An economic model of artistic behavior

Conclusion What we have accomplished is to provide a framework in which artists are seen as economic individuals who base decisions on the same set of factors as nonartists. We are uncomfortable with the notion that artists are a special breed who are not responsive to economic incentives. We are also uncomfortable with the notion that nonartists could never be artists. However, the model as presented does allow for the possibility that an artist will incorrectly estimate the worth of his or her works, and continue to pursue an artistic career. It also allows for the possibility that some nonartists may also make the wrong choice and pursue a nonartistic career instead of an artistic one.     

The impact of cultural economics on economic theory

The paper asks what kind of impact cultural economics has had on the development of economic theory. Six research areas are discussed: productivity differentials between artistic and non-artistic labor, variations of the public good concept, particularly in relation to environmental goods, endogenous changes in preferences, long-term rates of return on paintings, impact of new media technologies and the autonomy of artistic valuation.It is shown that these topics have relevance beyond their applications in the cultural field, and that the theoretical issues involved challenge standard assumptions and standard modelling procedures in economic theory.Presidential address delivered at the 9th international conference of the Association for Cultural Economics, held in Boston, May 8–11, 1996.     

一个海外游子的忆念

正中国是世界上的文明古国之一。我是杭州人,出国前毕业于浙江大学,在世界银行工作了几十年,曾为祖国的教育事业作过一些贡献。故乡,对于一个远离家乡的游子来说,既神圣又陶醉,魂牵梦系,尤其身在异国,浓浓的乡愁难以排遣。我离开祖国已超过了一个甲子,感谢《文化交流》编辑部数十年如一日,寄来杂志,给我送来极大的温暖。《文化交流》是我和祖国、家乡联系的精神纽带。每到时间,我就盼望着《文化交流》杂志的到来,拿到后欣喜万分,欢喜这本精美杂志的还有我身边     

Cultural determinants of economic growth: Theory and evidence

Shortcomings of neoclassical growth theory and growth accounting are viewed as a challenge for cultural economics. Recently, new growth theory has introduced several growth determinants and has closed the gap between theoretical and empirical research. Whether this development leaves space for cultural determinants in explaining economic growth is in the center of this paper. The theoretical analysis shows how an endogenous growth model can be used to explain the impact on economic growth of cultural determinants. The empirical part uses indices from cross-cultural studies to extend recent cross-country growth regressions. Among other Hofstedes uncertainty avoidance index is shown to be significantly correlated with economic growth.Discussion paper presented at the 9th international conference of the Association for Cultural Economics, Boston, May 8–11, 1996.