Findings show property right equal prosperity

A study showing a direct correlation between strong property rights and high gross domestic product could be used as a carrot with changing market countries such as China and Russia that have substandard intellectual property protections.

Findings of the 2007 Intl. Property Rights Index, sponsored by a D.C.-based advocacy group, show that countries with strong property rights protection enjoy an average GDP per capita income eight times greater than that of countries with poor protection.

“While the study links together things that are intuitive, it also helps to focus minds and gives us a strong platform for discussion with other countries,” said the Dept. of Commerce’s IP czar Chris Israel. “It should be a call to leaders around the world for strong property rights.”

The IPRI “represents one of the first attempts to devise and launch an international gauge that ranks countries according to their strength and effectiveness in protecting property,” according to the study. Property Rights Alliance, the advocacy group that sponsored it, plans to issue subsequent versions annually.

Study focused on 70 countries that collectively account for 95% of world GDP. Rankings were broken into “quartiles,” with Norway, Netherlands, Denmark and Sweden taking the first four spots in the top quartile. The United States, also in the top quartile, tied with Ireland and Canada for 14th place.

With the exception of Russia, Romania and Ukraine, the bottom 25% of countries were all African or Latin American.

“Property rights (including physical property) are the vital prerequisite for economic progress and prosperity,” IPRI stated. “The degree to which intellectual property is protected also highly influences a country’s inventive character as it shapes the flow of innovative ideas and products that are developed, which in turn affects creative and economic wealth.”

The study “dispels prejudices,” said Tim Kane, director of the Center for Intl. Trade and Economics. “Norway is at the top of the list. Is that what you expected? The Nordic economies are some of the most free in the world.”

Stressing the negatives of piracy, Hollywood and the recording industry have long been pressuring some countries to crack down on bootleggers.

“A lot of times, groups get into the micro level of a problem,” said PRA exec director Scott A. LaGanga. “We’re trying to take a step back here to the macro level, to say that protecting IP protects you and your country’s economy.”

Study also showed a direct correlation between strong property rights protection and foreign investment.

“This study really adds to the ‘why’ about how countries should protect property rights,” Israel said.

To view the report online, go to internationalpropertyrightsindex.org.

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