Category: Discoveries

Further Development of the Model

Iteration 1 of Prototype

We now set out the initial iteration of the model, and its conceptual framework.^[i]

We model productivity as a function of factors which have a direct impact on productivity in a country. These factors are themselves influenced by the policy decisions of a country. The factors affecting productivity are: stock of foreign direct investment, stock of capital provided by the financial sector, health expenditures, and human capital stock per worker.  However, fuel exports, and ore and metal exports need to be considered as these could distort a nation’s productivity particularly if it relies on them unduly. Health expenditures may be a weak proxy for health outcomes, and in future work other proxies might be used.  The policy decisions are captured using our three indicators: Property Rights Protection, Domestic Competition, and International Competition. The structure of the estimation and the results are described below Productivity is measured in terms of GDP per capita. We estimate a reduced-form model to determine the factors which affect productivity. These factors are themselves influenced by the scores for Domestic Competition, International Competition, and Property Rights Protection. Our productivity model is:

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[i] There have been a number of attempts to model the economic impact of ACMDs.  There is ongoing work emanating out of the Singham-Rangan-Bradley model, and there is also work done by the Centre for Economics and Business Research, see Shanker A. Singham and Douglas McWilliams, “Improving the Economic Modeling of Trade Agreements,” Cebr (20 May 2020), https://cebr.com/reports/improving-the-economic-modelling-of-trade-agreements/.

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The Interface Between Competition and Intellectual Property Policy: The Role of Competition Agencies

This paper examines the interface between competition policy and intellectual property policy. It is often said that there is a tension between these policies, as competition policy is generally opposed to monopolies, and intellectual property is deemed to support them.

However, this tension is based on a series of assumptions which we do not believe are accurate. Rather, both policies have the same fundamental goal, which is to ensure the stimulation of innovation. In addition we will examine the role that competition agencies play in this and other areas in the wider economic context.

Competition advocacy is a vital part of the job of all competition agencies, and it is critical in advocating for competition policy as an organizing principle, competition agencies advocate for competition in the true sense of the term. Competition is a widely misunderstood term and is frequently used by organs of government as a justification for particular policies that are very often anticompetitive.

It is critical that competition agencies, expressing a consumer welfare enhancing approach to competition policy, educate other government ministries about the nature of competition.

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The Economic and Moral Case for Property Rights, Open Trade and Competitive Markets

The below is an extract from the paper ‘From Poverty to Prosperity’, originally published by the Legatum Institute. Please click here to read the full document.

Undertaking the journey from poverty to prosperity has been the primary task of humanity since we first came out of the cave.

The ancient Hindu scripture, the Rig Veda, says that: “No one is superior, none is inferior. All are brothers marching towards prosperity.” Conventional wisdom holds that human beings naturally embody twin but separate impulses:

a. the desire for self-enrichment, to move from material poverty towards the satisfaction of physical needs; and

b. the desire to care for vulnerable people and to seek a sense of a higher sense of meaning and purpose.

The first speaks to the need to satisfy temporal needs and wants. This is what most people understand, incorrectly, as a limit of prosperity. The second speaks to man’s inherent desire to satisfy a spiritual need.

Unlike temporal needs, our spiritual needs are satisfied by giving and service. True prosperity cannot be achieved without it. In reality, these impulses are deeply intertwined within every human being. They cannot be separated without damaging the integrity of the person. When human beings meet together in voluntary exchange to serve the other’s needs, that single transaction has both a temporal and spiritual dimension.

The exchange allows both sides the potential to become more materially prosperous and more spiritually prosperous; indeed, that is why humans seek such exchanges. Reducing an exchange to one or the other dimension, or damaging it by putting obstacles in its way, hinders both the temporal and spiritual gains that would otherwise arise. Therefore, the goal must be to reduce to zero—or as close to zero as possible—any obstacles to voluntary exchange. In doing so, nonzero sum growth in both economic and spiritual terms is made possible.

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