Question

Distinguish and discuss the role of Formal vs. Informal institutions in the history of IPR violations and protections?

To what degree will Formal Institutions play a part in what China will become?

What about Informal Institutions?

Answer 1

FORMAL VS INFORMAL:

In the history of IPR violation and protection of Institutions are the formal and informal rules and norms that organise social, political and economic relations (North, 1990). They are not the same as organisations.

Key features of institutions are:

• In institutions They are brought to life by people and organisations.
• They provide a relatively predictable structure for everyday social, economic and political life.
• Institutions shape people’s incentives (or calculations of returns from their actions) and behaviour.
• They establish a predictable, though not necessarily efficient or uncontested structure for human interaction.
• Some argue institutions shape but do not necessarily always determine behaviour.
• They lead to enduring patterns of behaviour  over time but they also change.
• Institutions are constantly being reformed through people’s actions.
• Institutional change structures the way societies evolve.
• However, institutionalised behaviours can be hard to change.
• They produce positive or negative development outcomes.
• This depends on the kinds of relations and behaviours that institutions enable.
• The outcomes for the enjoyment of rights and allocation of resources in society (Leftwich & Sen, 2010).
• Institutions and organisations

RULES OF THE GAME:

Institutions are ‘the underlying rules of the game’. Organisations are ‘groups of individuals bound by a common purpose’. Organisations are shaped by institutions and, in turn, influence how institutions change. Some social scientists view organisations as the material expressions of institutions. Some see social groups such as government bodies, tribes and families as institutions. Some identify ‘primary’ or ‘meta’ institutions to be the family, government, economy, education and religion.

DIFFERENCE BETWEEN THE FORMAL AND INFORMAL:

• Institutions are both formal and informal.
• In practice, formal and informal rules and norms can be complementary, competing or overlapping.
• Whether they are relatively more strong/weak or inclusive/discriminatory is likely to depend on context.

FORMAL:

• Formal institutions include the written constitution, laws, policies, rights and regulations enforced by official authorities.
• Development practitioners have tended to prioritise formal institutions,
• Informal social norms often shape the design and implementation of formal state institutions.

IN  FORMAL:

• Informal institutions are (the usually unwritten) social norms, customs or traditions that shape thought and behaviour .
• viewing informal ones as separate and often detrimental to development outcomes (Unsworth, 2010).
• In some cases, informal institutions undermine formal ones; in others,

IPR Violations and Protection:

• There is a great deal of frustration regarding the lack of progress on intellectual property rights (IPR) protection in China.
• This article leverages the historical episode in most of the 19th century during which the United States was the leading IPR violator.
• Great Britain as the superpower of the time sought but failed to convince the United States to improve IPR protection.
• Advancing an institution-based view of IPR protection, I argue that both the U.S. refusal to protect foreign IPR in the 19th century and the current Chinese lack of enthusiasm to meet U.S. demands on IPR protection are rational.
• However, if history is any guide, the future outlook is not depressing. In 1891, the United States voluntarily agreed to protect the IPR of foreign works.
• Because the U.S. economy became sufficiently developed and U.S. IPR started to be pirated elsewhere.
• Drawing lessons from this episode of history,I predict that IPR protection will significantly improve when Chinese IPR are widely pirated by foreign violators outside of China.