The Supply Side of Innovation: H-1B Visa Reforms and US Ethnic Invention

This study evaluates the impact of high-skilled immigrants on US technology formation. We use reduced-form specifications that exploit large changes in the H-1B visa program. Higher H-1B admissions increase immigrant science and engineering (SE) employment and patenting by inventors with Indian and Chinese names in cities and firms dependent upon the program relative to their peers. Most specifications find limited effects for native SE employment or patenting. We are able to rule out displacement effects, and small crowding-in effects may exist. Total SE employment and invention increases with higher admissions primarily through direct contributions of immigrants.Innovation, Research and Development, Patents, Scientists, Engineers, Inventors, H-1B, Immigration, Ethnicity, India, China, Endogenous Growth

A Club No More - The WTO after Doha

Since its inception the GATT, and subsequently the WTO, has been able to operate in a fashion that is more consistent with a club than an inclusive organization that encouraged the active participation of all its members. The WTO Ministerial Meeting in Doha in November 2001 appears to have been a watershed in how the organization functions, and the club model may no longer be appropriate. While it is not yet clear what will replace the previous model, it is apparent that decision making will be much more diffused and the interests of a much broader spectrum of member countries taken into account. The central question is whether or not the transformed organization can still serve the interests of those who were previously able to dominate the club–the major trading nations. If it cannot, they may look for another club that will better serve their purposes, and all the effort that has gone into building a well functioning multilateral trade regime will have been for naught. Those members that worked so hard to end the club may not reap the benefits they expect unless they are prudent in how they use the power that they now hold within the WTO.club, developing countries, Doha, international trade, multilateral organization, WTO, International Relations/Trade,

A New World Chaos? International Institutions in the Information Age

The technological revolutions that underlie the new information age will tax considerably the abilities of existing international institutions to bring order to international relations. Rapid rates of change may lead to chaos if international institutions cannot evolve to accommodate those changes. In some cases, new organisations will be required. The role given international organisations in establishing order in the latter half of the 20th century is reviewed. The new challenges presented by the information age are outlined. Whether the existing international organisations will be sufficiently flexible to accommodate the changes brought by the information age is assessed.change, globalisation, international institutions, law, trade policy, International Relations/Trade,

Special and Differential Treatment: A Mechanism to Promote Development?

Much has been made of "special and differential" treatment in the Doha Development Round of WTO negotiations. In particular, a conscious effort has been made to infer that special and differential treatment will promote development. While special and differential treatment may be a necessary evil given developing countries' higher adjustment costs, dignifying it as a development mechanism plays into the hands of protectionist interests. In particular, by allowing a general increase in the ability of developing countries to isolate their economies, it may reduce the efficacy of important forces that prod institutional reforms in developing countries. As institutional reform is one of the keys to economic development, lionizing special and differential treatment in the WTO is likely to be counterproductive.development, institutional reform, protectionism, special and differential treatment, WTO, International Development,

International Harmonization and the Gains from Trade

International harmonization of standards and regulations is often a goal expressed in trade agreements because it is expected to yield gains from trade. Absence of progress toward harmonization is often interpreted as being motivated by protectionism, with differences in standards and regulations seen as non-tariff barriers. While protectionism may well be the source of resistance to harmonization, there may be other reasons it is not pursued. These alternative explanations have not received much attention from economists. In this article some of these alternatives are outlined - demand effects from altering standards, switching costs, proprietary technologies. The article concludes that proposals for international harmonization need to be scrutinized carefully.demand effects, harmonization, regulation, standards, switching costs, TBT, International Relations/Trade,

The Efficacy of TRIPS: Incentives, Capacity and Threats

There is a major split between developed and developing countries over the protection of the patents in pharmaceuticals in the TRIPS. This dispute is symptomatic of the difficulties of incorporating a non-trade issue into a trade organization. Incentives and threats are examined in the context of the TRIPS. It is concluded that developing countries have no direct incentives to protect intellectual property, that the threat of trade actions is unlikely to induce compliance and that the use of indirect incentives is discredited and will fail to achieve its objective over the long run. Successful protection of intellectual property in developing countries will require a way to provide them with a direct incentive to enforce such protection.enforcement, incentives, intellectual property, knowledge economy, threats, TRIPS, International Relations/Trade,

Who Should Make the Rules of Trade? - The Complex Issue of Multilateral Environmental Agreements

In recent years, governments have negotiated a number of Multilateral Environmental Agreements (MEAs) that include clauses regarding trade measures that conflict with their WTO obligations. As yet, there has been no formal dispute regarding which obligations should prevail, but the threat of conflict is perceived to be sufficiently grave for the parties to the Doha Ministerial to agree to examine the issue. Those who have strong preferences for environmental amenities have put considerable effort into fostering MEAs and are lobbying hard for them to prevail over the WTO in their areas of competence. The current lack of transparency caused by conflicting rules increases the degree of risk perceived in the international commercial environment. As MEAs allow trading partners to impose trade barriers on ratifying partners when the WTO rules would not, a perverse set of incentives is created that may lead to sub-optimal levels of environmental protection as well as sub-optimal amounts of investment in trade-related activities. The use of trade measures in MEAs is examined and suggestions are provided for removing the conflicting rules of trade.Doha, MEA, negotiations, ratification, trade measures, WTO, International Relations/Trade,

The Changing Nature of Protectionism: Are "Free Traders" Up to the Challenges It Presents?

In the economic model that underlies the WTO the only group that can be expected to ask for protection is producers in importing countries. The existing multilateral trade architecture reflects that assumption. Much of the recent criticism of the multilateral trade regime has arisen as a result of new groups explicitly asking domestic politicians for protection. As these groups were not expected to ask for protection, the international trade regime does not allow domestic politicians to extend protection on the basis of the new demands. Further, countries are expected to perceive benefits from trade liberalisation. These benefits must be balanced against the expected political benefits of protectionism (and their associated welfare costs) when trade negotiations are being conducted. Failed economies, however, see few benefits from liberalisation and, hence, are biased toward protectionism, particularly if trade restrictions are a source of corruption incomes. This article explains the sources of new appeals for protectionism, outlines the relationship with traditional producer protectionism and lays out the challenges the new pressures present for trade-liberalising multilateral institutions.consumers, environmentalists, failed economies, producers, protectionism, welfare, International Relations/Trade,

The Agglomeration of US Ethnic Inventors

The ethnic composition of US inventors is undergoing a significant transformation - with deep impacts for the overall agglomeration of US innovation. This study applies an ethnic-name database to individual US patent records to explore these trends with greater detail. The contributions of Chinese and Indian scientists and engineers to US technology formation increase dramatically in the 1990s. At the same time, these ethnic inventors became more spatially concentrated across US cities. The combination of these two factors helps stop and reverse long-term declines in overall inventor agglomeration evident in the 1970s and 1980s. The heightened ethnic agglomeration is particularly evident in industry patents for high-tech sectors, and similar trends are not found in institutions constrained from agglomerating (e.g., universities, government).Agglomeration, Innovation, Research and Development, Patents, Scientists, Engineers, Inventors, Ethnicity, Immigration.

Strategic Devaluation, Trade and Political Convenience

The economies of developed countries have, since 2007, experienced the most significant and persistent period of economic malaise since the 1930s. Domestic economic policies have failed to revive sustained economic growth and, as a result, unemployment remains at levels that voters find difficult to accept. In addition, without tax revenue-enhancing growth, government deficits persist, and borrowing to finance the cumulative deficits has become increasingly difficult for some countries. With domestic policies largely exhausted, but economic growth elusive, policy makers have been considering external policies as a means to stimulate their economies. Trade protectionism and strategic devaluation are potential policies. The lessons of the 1930s regarding the dangers of beggar thy neighbour protectionism appear to retain their currency with policy makers, but the same may not be true for strategic devaluation. The article outlines the likely poor efficacy of strategic devaluation as a politically convenient mechanism to escape the current economic malaise.Cooperative solution, Great Depression, retaliation, strategic devaluation, trade, Financial Economics, Institutional and Behavioral Economics, International Relations/Trade, Political Economy,