Kenneth W. Dam

Some Economic Considerations in the Intellectual Property Protection of Software

Intellectual property has frequently had to confront the issue of how to protect new technologies. The rise of software as a major industry is one such new challenge. An economic approach to the protection of software adds to the already extensive legal analysis. On the one hand, existing copyright and patent law provides a sound basis for an economically efficient system of protection. Copyright law deals with the appropriability problem without creating significant monopoly or rent-seeking problems. Copyright law also provides a sound basis for preserving a balance between innovation today and innovation tomorrow. These conclusions depend crucially, however, on maintaining the distinctions between attachment and replacement and between transformative and substitutive uses. Software-related patents are economically sound. However, as actually administered, the system may generate too many invalid patents. Sui generis protection is less desirable than copyright and patent protection.

Legal Institutions, Legal Origins, and Governance

The importance of institutions, including legal institutions, to economic development is widely accepted. But to accept the importance of legal institutions does not by itself provide guidance to policymakers in the developing world. One influential body of economic analysis emphasizes the importance of legal origin - that is, the legal family (such as French, German or English) from which a particular developing countrys law descended. Aside from the fact that the legal origin literature does not confront squarely its relevance to developing countries, this literature does not provide useful policy guidance because legal origin is a product of historical development and cannot be changed within a time frame relevant to the present generation of policymakers. At the same time, the legal origin literature is potentially misleading for policy purposes because the data underlying its regressions are suspect. Among the weaknesses in the data are various anomalies, including oversimplified coding of a particular countrys legal origin (which may indeed differ significantly between its private law and its public law). The emerging governance literature, developed at the World Bank, is compared with the legal origin literature as a practical guide to economic development policymaking.

China as a Test Case: Is the Rule of Law Essential for Economic Growth?

China is the fastest growing country in the world. Yet its adherence to the Rule of Law is frequently criticized. Does the coexistence of these two facts mean that institutions in general, and the Rule of Law in particular, are not necessary for sustained economic growth? The experience of the Asian Tigers, who had an overall growth record in their early years at least equal to Chinas, suggests that China may face a slowdown in growth. China is still a poor country, poorer than the Asian Tigers when their growth slowdown began. The Asian Tigers faced many of the same problems of crony capitalism, connected lending and poor corporate governance that China now faces. Chinas institutional and governance weaknesses involve a weak judiciary, including a lack of judicial independence; a weak financial sector with inadequate banking and corporate bond markets; and an outmoded bankruptcy system. Yet Chinas leadership, starting with Deng Xiaoping, has avoided some of the missteps of the transition countries of the former Soviet Union and has recognized the need for an evolutionary approach toward a more efficient economic system. But there is nothing in Chinas experience to date that would lead to the conclusion that institutional and Rule of Law issues are not important in economic development.

The Judiciary and Economic Development

No degree of substantive law improvement can bring the rule of law to a country without effective enforcement, and a sound judiciary is the key to enforcement. Judicial independence and the strength and efficiency of judiciaries are associated with economic growth. Some research finds legal formalism (that is, procedural complexity) undesirable. Though procedural complexity may be a barrier to judicial efficiency, it is also true that some procedural rules are designed to avoid legal error, also surely an aspect of efficiency. In any event, many of the measured differences in formalism between the common law and civil law are related to the far different role of counsel and judge in the two legal systems. Judicial efficiency measured in terms of duration of cases shows an extraordinarily wide variance among countries within individual legal families, suggesting that something at least as significant as legal origin may be involved. The related concepts of separation of powers and of checks and balances are not well-defined, and their meaning varies depending on the country and the objective of the constitutional founders. For economic development the constitutional provisions on review of administrative acts take on special importance. Judicial independence is not just a question of the structural independence of the judiciary within the governmental system, but also of the behavioral independence of individual judges. The latter is based both on law (for example, lifetime tenure) and on the method of appointment of the judiciary, but also on the education, economic security, and place in society of individual judges. Especially noteworthy in this regard is the traditional independence of English judges despite the absence of constitutional structural independence and of any power of judicial review.

Cryptography's role in securing the information society

Отчет Совета по информатике и телекоммуникациям (Computer Science and Telecommunications Board - CSTB), опубликованный в ноябре 1996 года. Отчет был восторженно провозглашен прессой за хорошо подобранные и весьма уместные материалы. В нем описано возрастание интересов к шифрованию, внимание правительства к распространению и управлению криптографией, даны рекомендации по перспективным направлениям развития криптографии.

Credit Markets, Creditors' Rights and Economic Development

Credit markets generate more finance than equity markets, particularly in developing countries. In credit markets the central institution, again especially in developing countries, is the bank. In many such countries, directed lending, crony capitalism, and related lending are key problems. And since banks are corporations, self-dealing involving loans to shareholders, managers, and politically important people is added to the common forms of corporate governance issues. Initial efforts to analyze credit markets through the lens of legal origin had the shortcoming that the focus was on the law of bankruptcy rather than the law of secured credit. And even within the area of bankruptcy, the focus was on reorganization rather than liquidation, which is more common in both developed and developing countries. The law of secured credit is especially important in countries where mortgages on land are unavailable due to the absence of land titling. Secured credit law is often defective because of the absence of self-help remedies, especially in view of lengthy court delays. Legal origin may be important to the efficacy of creditors rights in developed countries, but there is evidence that it is an unimportant factor in developing countries. The assumption of commonalities within a legal family is doubtful in law pertaining to credit markets, as shown by the sharp differences between U.S. and U.K. bankruptcy law and the many differences in secured credit law found by the EBRD in the transition countries. Where, as in many developing countries, judiciaries are weak, the law of secured credit is especially important because bankruptcy proceedings are likely to be slow and undependable. In such countries credit registries may, by building on the concept of reputation, provide a partial substitute for judicial proceedings.

Self‐Help in the Digital Jungle

Self‐help systems, protecting electronic content from unauthorized copying, are controversial, especially with copyright scholars who see them as endangering the fair use defense permitting certain forms of socially useful copying. Self‐help syssems, by harnessing both technology and the institution of contract instead of relegating contract providers to legal actions to enforce intellectual property rights, promise to expand the amount and diversity of content while reducing transactions and search costs. These systems also further moral rights of attribution and integrity. Such systems can evolve to accommodate fair users (especially through industry‐ wide standards setting), deter unauthorized copying through unobserved victim precaution, and strengthen social norms against such copying.

Class Actions: Efficiency, Compensation, Deterrence, and Conflict of Interest

of the burdens imposed on the federal court system by class actions and because of their limitations, interest has been growing in the possibility of creating alternative procedures, such as parens patriae actions. The purpose of this article is to examine some of the major choices that must be made in administration of the class action and in the development of alternatives to it. Since a vast outpouring of legal literature has discussed the intricacies of Rule 23, no attempt will be made to analyze the Rule. In the first four parts of the article, it will be assumed that the present wording and interpretation of the Rule do not constrain the courts in sensibly administering the class action.2 The central question discussed will be what calculus a judge should use in deciding whether to permit an action to proceed as a class action. In a fifth section the emphasis will be placed on legislative alternatives to the class action.

Institutions, History, and Economic Development

To gain insight into how the developing world can attain the Rule of Law and thereby further economic development, a good place to start is to ask how countries in todays developed world did so. Western Europe, for example, did not enjoy the Rule of Law in the Middle Ages but successfully achieved it over a number of centuries, at least in the economic sphere of enforcing contracts and protecting property rights. The events in England culminating in the Glorious Revolution illustrate the importance of legal institutions and, especially, of public law. The private law of contract and property were not sufficient. The problem of the predatory ruler had to be overcome, and England did so by vesting control in Parliament over the Kings revenues from public sources and his expenditures and by assuring the independence of the judiciary. The French revolution, in contrast, resulted in high quality unified private substantive law under the Napoleonic codes, but the public law system suffered from the subordination of the role of the judiciary.

The rules of the global game : a new look at US international economic policymaking

In The Rules of the Global Game Kenneth W. Dam provides, in clear and practical language, a comprehensive examination that helps non-economists make sense of the forces that shape U.S. international monetary policies. Elucidating both the internal structures and external ramifications of global economics, this book can be read with pleasure and profit by layperson and economist alike. It allows readers to go beyond the headlines to understand the policies that shape our economy and thus our lives.