Adams, Samuel. “Globalization and Income Inequality: Implications for Intellectual Property Rights.” Journal of Policy Modeling 30 5: 725-35. Print.

By conducting a study of income inequality in 62 “developing” countries over a 17 year period from 1985-2001, this study looks at income equality in general; furthermore, this paper also considers globalization as a contributory factor in income inequality.  The paper finds that globalization accounts for only 15% of the variance in global income inequality during the period studied; however, of that 15% variance attributable to globalization, the strengthening of intellectual property rights and direct foreign investment both accounted for a substantial increase in income inequality.

The author defines globalization as the empirically “greater mobility of the factors of production (capital and labor) and greater world integration through increased trade, foreign direct investment (FDI), and enforcement of intellectual property rights [IPR]” (725).  By tracing the effect of the WTO’s TRIPS (Trade-Related Aspects of Intellectual Property Rights)  Agreement on developing nations, Adams cites numerous economic studies that highlight the negative effects of globalization on countries whose GDP remains below $8000.  The authors also use a sophisticated statistically-driven, multivariable formula to calculate how income inequality in developing nations has widened in the period studied.  Because of statistically positive economic effects of FDI in Asian nations but negative effects in South American and African nations, the authors conclude that FDI might be sensitive to regional and cultural differences; however, countries that have implemented the WTO-sponsored TRIPS agreement on IPR demonstrated an across-the-board increase in income inequality among national populations.  According to Adams, the human capital needed to reduce income inequality in most of the developing nations with TRIPS implementation has yet to reach a “minimum threshold of skill” to positive affect the distribution of income.

In the end the author notes that the study provides  a couple of takeaways: 1) countries with more “open” economies and higher IPR protection have a higher level of income inequality; 2) the current IPR system favors the holders of the intellectual property (the Global North) over the manufacturing economies (the Global South); 3) the effectiveness of the IPR system is dependent on the level of technological skill; as such, countries in the “developing” world can compete with the technologized if they institute a rigorous education program and; 4) globalization isn’t the sole cause of income inequality within countries; in fact, it only accounts for about 15% of the overall income inequality.  Adams concludes that custom-tailored IPR systems that fit the needs of developing countries – instead of the needs of the WTO – will result in the most positive economic effects for developing populations.