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Abstract:
The stability of an economic policy regime depends in large measure on either its successful authoritarian imposition or on the general acceptance by society of the distributional status quo of assets and/or income. Although Argentina's Convertibility Plan "Currency Board" system) brought price stability and growth to the country, the inability or unwillingness of the government to attain a fiscal adjustment threatened its survival. The "fight for shares" in this "conflict society", which was inherited from previous regimes was never resolved. We show that this fight previously left unresolved through inflationary finance, was left unresolved through the rapid growth of indebtedness under the Convertibility Plan. From 1999 on the contradictions of the Plan had become obvious and it was clear that the key to future stable economic growth was dependent on finding a way to turn the "conflict society" into a "consensus society". The construction of such a society is still a pending task for Argentina.

Abstract:
The impressive growth of Internet markets has been accompanied by an important academic debate on how to regulate them. Commentators have suggested traditional top-down or bottom-up regulatory approaches based largely on ideological grounds. To date, there has been no rigorous analysis of the various proposals for e-commerce regulation.

In this article, the authors analyze the advantages and shortcomings of each regime and propose a mixed solution that maximizes net social welfare. The authors first present a model of the institutional background of an economic system and provide evidence of its functioning on the Internet, which permits an evaluation of market functioning on the Internet as compared to real world markets. This evaluation indicates that the Internet is a system technologically different from real life markets, and thus government and private sector initiatives have a different impact on its structure. The authors also examine the economic and political implications of Internet regulation, discuss the various bottom-up and top-down approaches to this regulation, and conclude that a pure regulatory system is not viable and that a cooperative result is welfare improving. The authors then construct a game theoretic model in order to analyze the different regimes proposed for Internet regulation. Based on this analysis, the authors propose a new, optimal regulatory regime based on tacit cooperation between the government and private sector regulators and show how such a regime maximizes net social welfare for both consumers and firms and avoids the drawbacks of the top-down or bottom-up regulatory approaches.

In this tacit, public-private cooperative solution, the authors identify a role for government in setting minimum baseline standards for problems such as online privacy, preventing the capture of private regulators through meaningful oversight, increasing the participation of firms in private regulatory initiatives, and also serving as the enforcer of last resort.

Finally, the authors perform two, thorough case studies of private third-party regulation - regulation of online privacy by BBBOnLine and regulation of online consumer fraud by the Federal Trade Commission (FTC). The authors demonstrate how both private self-regulatory and top-down government regulation can be improved significantly by incorporating specific insights drawn from their optimal regulatory regime.

Abstract:
The future looked bright for Argentina in the early twentieth century. It had already achieved high levels of income per capita and was moving away from authoritarian government towards a more open democracy. Unfortunately, Argentina never finished the transition. The turning point occurred in the 1930s when to stay in power, the Conservatives in the Pampas resorted to electoral fraud, which neither the legislative, executive, or judicial branches checked. The decade of unchecked electoral fraud led to the support for Juan Peron and subsequently to political and economic instability.

Abstract:
In this paper, we formally demonstrate that incorrectly issued patents can survive in the market without judicial review, even when the invention is neither novel nor non-obvious. We support this contention by presenting a game theoretic model that studies the interaction between the patentee and an alleged infringer/challenger. Using this model, we demonstrate the impact of the transaction costs in the patent system at the administrative stage in the Patent Office and at the enforcement stage in the courts, and highlight the inability in our current system to mount effective challenges to improperly granted patents in the current system. We also evaluate how changes in patent litigation costs and the quality of adjudication in the courts affect the incentives to challenge patents thereby affecting the probability of securing a patent. We show that there is a need to advance new mechanisms to improve the administrative processes employed by the Patent Office.

Specifically, we support including administrative challenges, such as patent oppositions, in order to improve Patent Office functioning by correcting and limiting the number of improperly granted patents. We describe and analyze the characteristics of such an opposition system, including the costs of such a process, the timing of the process with respect to patent issuance, and the scope of the estoppel granted to such a process for both subsequent oppositions and court challenges to the patent. We conclude that a low-cost, post-grant, opposition process based primarily on written submissions with a limited estoppel effect and administered by Administrative Opposition Judges (AOJs) will serve as an effective instrument for improving the quality of patents that are issued and enforced. In other words, including these incentives for producing better quality patents will decrease the number of incorrectly issued patents. These incentives will improve overall social welfare thereby reducing the incentives for strategic conduct and aggressive patenting in many technology areas.

Finally, we present empirical results from an exciting patent reform experiment taking place in Japan in the past four years and compare these results to the insights obtained from our model. Since April 2000, Japan has embraced a dual patent invalidation system that permits patent challenges in both the Japanese Patent Office (JPO) and their District Courts. Our empirical data on dual invalidation processes in Japan from 2000-2003 demonstrate that there are sound economic and institutional reasons for maintaining the ability to raise patent validity challenges in both the Patent Office and the courts since both mechanisms are complementary and necessary.

Abstract:
We provide an analytical narrative of the political and economic causes and consequences of institutional changes in the Argentine banking system. We devote most of our attention to the privatization of the provincial banks. Our story differs from the prevailing wisdom in its stress on the key roles played by convertibility and an independent Central Bank rather than the Fondo Fiduciario.

Abstract:
We provide an analytical narrative of the political and economic causes and consequences of institutional changes in the Argentine banking system. We devote most of our attention to the privatization of the provincial banks. Our story differs from the prevailing wisdom in its stress on the key roles played by convertibility and an independent Central Bank rather than the Fondo Fiduciario.

Abstract:
This paper presents a thorough empirical study of the performance of UDRP providers. We analyze the decisions of the complainants in deciding to send their claim to a particular provider and show that the duration of the dispute resolution services is at least as important as bias in determining the initial selection of providers. Our results show that the emphasis of theoretical and empirical work, which has been exclusively concentrated around the effects of pro-complainant bias, is, at least, incomplete. We then use the duration of these cases as the main variable to measure the general efficiency of each provider. Among our main findings, we claim that the various UDRP providers have different duration functions, implying the existence of forum shopping. Second, we demonstrate that there is bias in favor of specific countries for the different providers. Third, some panelists have completely different performance characteristics compared to the others suggesting that they are employing different methodologies to arrive at their decisions. Fourth, the performance of the providers is affected by the proofs presented by the complainants and respondents. Finally, we find that three member panels are just as efficient as single member panels. Our detailed analysis of the UDRP process has significant implications for the design of private dispute resolution regimes in general.

Abstract:
The market for biotechnology products has expanded rapidly in the 1990s and is expected to give impulse to radical changes in agriculture around the world. Investment in research and development (R&D) of new seed varieties has become a key factor for agriculture development. In the last decades, the investment in R&D has switched from state sponsored research to private funding. At the same time, the market has moved towards a strong concentration in a few multinational firms, which now control most of the agricultural biotechnology R&D around the world.

One of the most important issues regarding ag-biotechnology is the legal environment in which seeds are going to be produced and traded. A homogeneous legal framework characterizes domestic markets, while in international markets different legislation can distort or change marketing and production incentives. This paper analyzes the legal differences between the United States and Argentina, two of the most important exporters of grains in the world. As we show, the evolution of legislation and regulation in both countries help us understand the challenges of generating homogeneous protection in international markets, as well as the incentives for private sector companies operating under different legal systems.

We will highlight the differences in property rights protection, as well as the incentives for producers and traders. The comparative analysis of this paper provides a useful framework to understand the complexities of international regulatory systems, and the challenges that multinational and local seed producers face in developing countries with weak legal/regulatory systems for the protection of intellectual property rights. The implications of not creating and providing significant legal regimes for protecting agricultural biotechnology innovation has significant impact in terms of the allocation of resources devoted to both indigenous research on plant innovation and also on the choices being made by growers acting in response to current weak property regimes.

Abstract:
The creation of ICANN was sought by the United States government to promote international cooperation in the governance of the Internet based on a bottom-up system in which government intervention was limited, if not eliminated. However, as the Internet has become a global phenomenon this initiative has faced increasing opposition from the international community. As we have shown in this work, the evolution of ICANN reveals how it slowly departed from its mere technical role into a more political one, in which all groups and constituencies try to impose their preferences. During the reform movement initiated from inside ICANN, different constituencies tried to exploit the situation by gaining power positions in the new structure. The political strength of different groups and constituencies reversed some of the initial reforms and produced a totally new structure. Reform attempts from inside ICANN were challenged by the international community. These efforts concentrated on changing the main structure of ICANN into a multilateral organization controlled by international governments and removing the direct control of ICANN from the United States government. In the end, even though the proposals seem to look for different structures to regulate domain names and numbers on the Internet, they represent a political struggle between opposite points of view.

Among the results of our analysis we can highlight the following: first, as a result of the reform process, the private sector consolidated its political position in the ICANN structure, at least in the short run. With the new Bylaws, the private sector retained some of the power they had before and even gained more power. Among the winners of the reforms are: the GNSO constituencies, which gained important power spaces in the new design, ASO members, which had some gains, but more importantly, are still debating their future with a possibly more expansive relationship with ICANN, and the ccNSO, which were recognized as an independent Supporting Organization. Nonetheless, the inside-out attempt to reform proved to be weak because it failed to bring outside constituencies to the governance body and created opposition from the international community.

The inside-out reform analysis allowed us to examine the political strength of its different constituencies. This process also showed how ICANN has become more of a political instrument, instead of a technical corporation. An indication of this is that most of the debate on the reform was based on how to divide the power inside ICANN, more specifically inside the Board of Directors, and how to maximize the capacity of each group to enforce their policies.

Second, our analysis shows how the inside-out reforms sought to enhance international cooperation. Creating a Supporting Organization for the ccNSO and the incentives for international governments to participate in a better CGA opened the ICANN gates to more extensive international participation in policymaking. However, the international community did not respond adequately to the reform and tried to generate its own model for Internet Governance.

The response of the International community to the regulatory regime of ICANN was the creation of a new organization with international ties and controlled by governments. This proposal, as summarized in the WGIG report, sought to overhaul ICANN and take away the United States' direct control of ICANN and the management of names and numbers on the Internet. As a result, we face a struggle between two different types of regulation, a bottom-up approach, with more participation from the private sector, and a top-down approach which intends to take Internet governance into the international arena.

As shown in this work, Internet governance has become a hot political issue, and the organizations in charge of managing the regulatory regime will reflect these political preferences. The effectiveness of any of these governance regimes will depend on how well the specific structure of power provides an opportunity for consensus. In the end, the reform and the political struggle behind it have unmasked the political nature of ICANN. As a result, its future will depend on the consensus of its constituents and on the struggle between state and private sectors. In this debate, the United States government is one of the only governments defending ICANN in its current structure because of the contract that ties ICANN directly to the U.S. Department of Commerce. On the other hand, the international community is pushing the U.S. to hand over its sole control of ICANN.

Given the tension between both parties, we believe that this transition could move forward through the creation of a supranational entity in charge, not just of ICANN's responsibilities, but also of other areas related to the Internet, i.e., e-commerce, Internet security. We call this organization the World Internet Governance Organization (WIGO), managed by a board representing the developed countries and the technical groups with a stake in the Internet. This would entail an institution organized somewhere in between the unilateral regime represented by ICANN and the multilateral approach proposed by the United Nations. WIGO would allow both parties to obtain some of their objectives. The U.S. would retain some power in designing the system, while other developed and developing countries would have more say in the direction of the system. A well-thought proposal that considers the foremost needs of the Internet will have a greater chance of succeeding than individual attempts to overtake over the governance of the Internet. Furthermore, it will generate a point of convergence for the diverse preferences of international stakeholders. Nonetheless, the success of such a proposal requires countries to realize that unorganized or individual attempts to regulate will not carry the day.

ICANN, Political Economy, Domain Name System

Abstract:
The creation of ICANN was sought by the United States government to promote international cooperation in the governance of the Internet based on a bottom-up system in which government intervention was limited, if not eliminated. However, as the Internet has become a global phenomenon this initiative has faced increasing opposition from the international community. As we have shown in this work, the evolution of ICANN reveals how it slowly departed from its mere technical role into a more political one, in which all groups and constituencies try to impose their preferences. During the reform movement initiated from inside ICANN, different constituencies tried to exploit the situation by gaining power positions in the new structure. The political strength of different groups and constituencies reversed some of the initial reforms and produced a totally new structure. Reform attempts from inside ICANN were challenged by the international community. These efforts concentrated on changing the main structure of ICANN into a multilateral organization controlled by international governments and removing the direct control of ICANN from the United States government. In the end, even though the proposals seem to look for different structures to regulate domain names and numbers on the Internet, they represent a political struggle between opposite points of view.

Among the results of our analysis we can highlight the following: first, as a result of the reform process, the private sector consolidated its political position in the ICANN structure, at least in the short run. With the new Bylaws, the private sector retained some of the power they had before and even gained more power. Among the winners of the reforms are: the GNSO constituencies, which gained important power spaces in the new design, ASO members, which had some gains, but more importantly, are still debating their future with a possibly more expansive relationship with ICANN, and the ccNSO, which were recognized as an independent Supporting Organization. Nonetheless, the inside-out attempt to reform proved to be weak because it failed to bring outside constituencies to the governance body and created opposition from the international community.

The inside-out reform analysis allowed us to examine the political strength of its different constituencies. This process also showed how ICANN has become more of a political instrument, instead of a technical corporation. An indication of this is that most of the debate on the reform was based on how to divide the power inside ICANN, more specifically inside the Board of Directors, and how to maximize the capacity of each group to enforce their policies.

Second, our analysis shows how the inside-out reforms sought to enhance international cooperation. Creating a Supporting Organization for the ccNSO and the incentives for international governments to participate in a better CGA opened the ICANN gates to more extensive international participation in policymaking. However, the international community did not respond adequately to the reform and tried to generate its own model for Internet Governance.

The response of the International community to the regulatory regime of ICANN was the creation of a new organization with international ties and controlled by governments. This proposal, as summarized in the WGIG report, sought to overhaul ICANN and take away the United States' direct control of ICANN and the management of names and numbers on the Internet. As a result, we face a struggle between two different types of regulation, a bottom-up approach, with more participation from the private sector, and a top-down approach which intends to take Internet governance into the international arena.

As shown in this work, Internet governance has become a hot political issue, and the organizations in charge of managing the regulatory regime will reflect these political preferences. The effectiveness of any of these governance regimes will depend on how well the specific structure of power provides an opportunity for consensus. In the end, the reform and the political struggle behind it have unmasked the political nature of ICANN. As a result, its future will depend on the consensus of its constituents and on the struggle between state and private sectors. In this debate, the United States government is one of the only governments defending ICANN in its current structure because of the contract that ties ICANN directly to the U.S. Department of Commerce. On the other hand, the international community is pushing the U.S. to hand over its sole control of ICANN.

Given the tension between both parties, we believe that this transition could move forward through the creation of a supranational entity in charge, not just of ICANN's responsibilities, but also of other areas related to the Internet, i.e., e-commerce, Internet security. We call this organization the World Internet Governance Organization (WIGO), managed by a board representing the developed countries and the technical groups with a stake in the Internet. This would entail an institution organized somewhere in between the unilateral regime represented by ICANN and the multilateral approach proposed by the United Nations. WIGO would allow both parties to obtain some of their objectives. The U.S. would retain some power in designing the system, while other developed and developing countries would have more say in the direction of the system. A well-thought proposal that considers the foremost needs of the Internet will have a greater chance of succeeding than individual attempts to overtake over the governance of the Internet. Furthermore, it will generate a point of convergence for the diverse preferences of international stakeholders. Nonetheless, the success of such a proposal requires countries to realize that unorganized or individual attempts to regulate will not carry the day.

Abstract:
This paper analyzes the evolution of property rights legislation in Argentina with respect to new seed varieties. In comparison to the United States, Argentina has weak protection and enforcement of property rights for new seeds. These weak property rights affect the registration and commercialization of new soybean seeds. We show how private producers of seeds react to differences in property rights between Argentina and the United States and also between corn and soybeans. As we show, investment efforts will concentrate on those crops with more secure property rights at the expense of the markets in which property rights are less secure. This effect has important consequences for a developing market producing in a global market.

Argentina, agricultural biotechnology, market regulation, property rights, seed markets

Abstract:
Research and development in agricultural biotechnology is closely related to property rights protection. Scholars have urged that the increasing participation of the private sector in this area requires a higher degree of protection than in previous decades, where government and universities were the main providers of new seed varieties. Most developing countries have been pressured into improving their formal framework for property rights protection by implementing the International Union for the Protection of New Plant Varieties (UPOV) standards. Multinational companies in biotechnology and seeds pushed for new legislation and the adoption of international regulations as a condition for new investment in the farming sector.

In this paper, we show that the adoption of any regulatory framework for intellectual property rights is not going to be effective if it is not accompanied by a general framework that fosters business investment. The empirical evidence presented in this paper shows that countries with better institutional framework have attracted more investors and traders into the local seed market.

Abstract:
We administer a basic mathematics exam to over 600 students enrolled in various college economics courses to understand what factors influence a student's ability to use basic math skills in solving simple real world problems. We find that students with strong elementary math skills are better able to use their math background in solving everyday problems. Moreover, our findings suggest that by taking more math classes in college, students significantly improve their ability to apply math in real world settings. Finally, we find that many demographic variables are important determinants, particularly the size of personal and family income. Students with greater personal financial responsibility in funding their education do significantly better in understanding and applying basic math skills.

Abstract:
In recent years, many reform proposals have been presented in Congress for changing the patent system in the United States. Most of these proposals have been normative in nature and based on overcoming the many perceived shortcomings of the United States Patent and Trademark Office’s (“Patent Office”) performance. Nonetheless, actual legislative reforms have failed to materialize.

In this Article, we claim that in order to understand the chances of success of any reform to the patent system, we should take a closer look at the patent system’s political economy. In particular, we should be aware of the different pressure groups with a stake in the system and their ability to influence congressional committees through which reform legislation is enacted.

We study the different constituencies favoring or opposing the reform and the strength of their bargaining power based on publicly available empirical data on political contributions by different groups and analyze the impact of political contributions to individual congressional representatives on individual floor votes on the Patent Reform Bill of 2007. In addition, we also take into account the effect of the patent system on different technology industries and economic sectors. As we show, each proposal will generate winners and losers who will try to push reforms forward or prevent them from being enacted. In order to succeed, any reform will need a minimum consensus among these stakeholder groups: firms in different technology sectors, inventors, the patent bar (divided separately into patent prosecutors and litigators), the Patent Office, and the courts.

Given the political processes, the final result of any reform will depart from any theoretical blueprint. As a consequence, a deeper understanding of this political process allows us to better understand the dynamics of reforms and the resultant characteristics of the patent system. In the end, as in any other institutional device, the characteristics and performance of the patent system, plus its sustainability or reforms over time, depend on the preferences of the polity, specifically on the preferences of the groups with a definite stake in the performance of the system. We also determine that the effects of the patent system on different technology and economic sectors will ultimately shape the different constituencies favoring or opposing the reform. We observe that support for any patent reform will depend on the specific factors that define the structure of each economic sector. Furthermore, in each sector, firms have different preferences depending on their economic power and particular stakes in the patent system.

Abstract:
The future looked bright for Argentina in the early twentieth century. It had already achieved high levels of income per capita and was moving away from authoritarian government towards a more open democracy. Unfortunately, Argentina never finished the transition. The turning point occurred in the 1930s when to stay in power, the Conservatives in the Pampas resorted to electoral fraud, which neither the legislative, executive, or judicial branches checked. The decade of unchecked electoral fraud led to the support for Juan Peron and subsequently to political and economic instability.

Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

Abstract:
Many developing countries' exports tend to be highly concentrated in terms of sectors and even products. In particular, they are strongly specialized in self-contained sectors. Recent economic literature has shown that institutions contribute to explaining this pattern. In this paper, we argue that the degree of self-containment itself is endogenous to institutions. Ceteris paribus a given sector will therefore have different levels of interactions with the rest of the economy across countries depending on the quality of institutions. We provide supportive evidence using a simultaneous equation approach on data on sectoral trade, country-specific input-output linkages, and institutional strength.