The Impact of Intellectual Property, Ethnic Fragmentation, and State Intervention on Economic Growth

Extract

[...] If we take this graph as a whole and not in relation to these exceptions, we can observe that in general, if ethnic fragmentation is high, the percentage of people who trust others is low. Economically, this leads us to think that nations with low ethnic fragmentation are those that generate the most wealth and therefore have a higher GDP per capita than other countries. Question Size of government Several theories contend about whether state intervention is good or bad for growth. We will present several arguments supporting these different viewpoints. [...]

[...] To illustrate his theory, he relies notably on the Protestant culture, which, in his eyes, values work more than Catholics, Greeks, and Romans. Thus, the savings reflex seems culturally determined, and trust is an indispensable philosophy for the economic development of a society. This trust is often determined by its religious affiliation, which shows that the wealth produced and accumulated is well different according to its reference religious group. In fact, a belief system can tend to value the 'work' value and the 'savings' value more than another and generate a relatively heterogeneous GDP per capita. [...]

[...] For individuals experiencing health difficulties, health insurance allows for maintaining fixed income and ensuring the financing of care so that the person can regain their place in the productive world. The elderly benefit from retirement, just as unemployed individuals benefit from unemployment benefits. Thanks to these state aids, these individuals actively participate in the growth of a nation. The theorists of supply do not share this view and think that state intervention is detrimental to growth. For them, the numerous levies to which businesses are subject reduce productive yields. They think that taxes and charges are constraints from which one must extricate oneself to promote free individual initiative. [...]

[...] In their view, it is necessary to promote this savings by eliminating the regulations that constrain financial markets and by reducing the taxes of the most fortunate, whose propensity to save is higher. Figure 3 shows US government spending over 60 years, from 1945 to 2005. Upon reading this document, a clear trend emerges. Despite a significant increase in public spending over these sixty years, the real GDP per capita growth rate is in free fall. The example of the United States over this period leads us to think that an interventionist state policy does not contribute to producing more wealth since the GDP growth rate has significant fluctuations but downward. [...]

[...] Intellectual property is one of the main tools for protecting all existing creations whether they are of literary, industrial or artistic nature. In our society, it is clear that there is a continuous increase in global exchanges that enables the rapid dissemination of knowledge and information, which are the very foundation of innovation. This dissemination further increases the risk of losing exclusivity on one or more inventions for creative and innovative companies, making it necessary to protect them. Companies have developed and adapted to the evolution of industrial property to highlight the link between economic growth and intellectual property, the main tools for protection being the patent and the trademark. [...]