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Strategic Public Policy Toward Agricultural Biotechnology with Externalities in Developing Countries

Author

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  • Chattopadhyay Anasuya

    (University of Calgary, Canada)

  • Horbulyk Theodore M.

    (University of Calgary, Canada)

Abstract

Game theory and numerical simulation analyze the host government's role in strategically regulating intellectual property rights (IPRs) for agricultural biotechnology in a developing country. A foreign monopolist imports and sells a genetically modified crop variety that will offer the host country both selective productivity gains and a negative externality. In this small open economy, only some heterogeneous producers adopt the new variety. Public policy consists of IPR enforcement and a corrective tax. Effectiveness of the tax depends upon the foreign monopolist's ability to alter the price of the new technology and upon whether or not there is full enforcement of the IPRs. Whereas some governments may see their key decisions as being whether or not to license and to enforce IPRs on a genetically modified crop variety, greater gain might be realized through strategic choice of the tax rate to influence the rate of adoption among diverse domestic producers.

Suggested Citation

  • Chattopadhyay Anasuya & Horbulyk Theodore M., 2004. "Strategic Public Policy Toward Agricultural Biotechnology with Externalities in Developing Countries," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 2(1), pages 1-29, August.
    • Handle: RePEc:bpj:bjafio:v:2:y:2004:i:1:n:6
    DOI: 10.2202/1542-0485.1048
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    References listed on IDEAS

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    1. Giannakas, Konstantinos & Fulton, Murray, 2002. "Consumption effects of genetic modification: what if consumers are right?," Agricultural Economics, Blackwell, vol. 27(2), pages 97-109, August.
    2. Zigic, Kresimir, 1998. "Intellectual property rights violations and spillovers in North-South trade," European Economic Review, Elsevier, vol. 42(9), pages 1779-1799, November.
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    4. Vishwasrao, Sharmila, 1994. "Intellectual property rights and the mode of technology transfer," Journal of Development Economics, Elsevier, vol. 44(2), pages 381-402, August.
    5. Konstantinos Giannakas, 2002. "Infringement of Intellectual Property Rights: Causes and Consequences," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(2), pages 482-494.
    6. James D. Gaisford & Jill E. Hobbs & William A. Kerr & Nicholas Perdikis, 2001. "The Economics of Biotechnology," Books, Edward Elgar Publishing, number 2305.
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    Cited by:

    1. Luc, Veyssiere, 2006. "Best Response to GMOs in Developing Countries," 2006 Annual meeting, July 23-26, Long Beach, CA 21075, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Chattopadhyay, Anasuya & Horbulyk, Theodore M., 2003. "Regulation And Enforcement Of Intellectual Property Rights For Agricultural Biotechnology In Developing Countries," 2003 Annual meeting, July 27-30, Montreal, Canada 22121, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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