Friday 28 March 2008

Darren Olivier

Stiglitz's "Making Globalization Work" in the dock

Writing for The New York Review of Books, Robert Skidelsky critically reviews Joseph E. Stiglitz's book "Making Globalization Work" in a clash piece entitled "Gloomy about Globalization". Skidelsky and Stiglitz (both heavyweight economists) comment on a number of issues affecting African countries, some previously reported on in this blog, including the tension between incentivising investment and R&D through robust IP regimes and access to drugs, and rules for traditional knowledge protection.

To whet your appetite, according to the review, Stiglitz, who was former advisor to the Clinton Adminstration and Chief Economist of the World Bank, "vigorously attacks the TRIPs" (trade-related aspects of intellectual property rights) agreement. Quoting from the review:

"TRIPs, he argues, have "imposed on the entire world the dominant intellectual property regime in the United States and Europe, as it is today." New drugs could save millions of lives in poor countries, but they are unaffordable because they are protected by patents that allow the drug companies to charge monopoly prices for a period of twenty years or more. By including patent protection in the World Trade Organization, he writes, American and European negotiators signed a "death warrant for thousands of people in the poorest countries of the world." Pharmaceutical companies should be forced to sell life-preserving drugs to poor countries at near cost—or face compulsory licensing of generic drugs that can be produced by, and traded between, developing countries. Stiglitz also wants to give poor countries reverse protection against what he calls drug companies' "bio-piracy"—exploitation of the traditional plant-based medicines of poor countries without paying for them.

Stiglitz raises the interesting question of whether, or how much, patent protection is needed as a spur to innovation, and in what fields. There is a case for arguing that such protection rewards trivial innovations, and slows down more fundamental ones by erecting barriers to entry into the market. It is also true that AIDS has shrunk life expectancy in southern African countries like Botswana, Kenya, Zimbabwe, Malawi, and South Africa. However, Stiglitz is wrong to single out TRIPs as the main obstacle to the use of antiretroviral drugs. As he recognizes, Brazil, another AIDS-ravaged country, simply disregarded the TRIPs regime and started manufacturing antiretroviral drugs on its own. In South Africa, by contrast, Health Minister Manto Tshabalala-Msimang denounced the drug nevirapine—used to prevent the transmission of HIV from mother to child—as "poison" to South Africa's women."

The book is available for sale here - ironically (given its content) only one price seems to apply to all.

Darren Olivier

Darren Olivier

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