Inventors in developing countries are usually unable to capture the full benefit of their innovations.They therefore tend to devote too few resources to research.Government can address this problem of under-investment in research by:
(i) increasing restrictions on trade
(ii) establishing a patent system to provide inventors with exclusive control over their inventions for a period of time
(iii) subsidising the purchase of technology from other countries.

Question

Quizplus · Accepted Answer

Increasing restrictions on trade (option i) would likely make it more difficult for developing country inventors to access the resources they need for research, as trade restrictions often limit the flow of goods and services across borders.

Establishing a patent system (option ii) would provide inventors with legal protection for their inventions, allowing them to capture more of the benefits of their innovations and potentially increasing their incentive to invest in research.

Subsidizing the purchase of technology from other countries (option iii) could potentially help inventors in developing countries access the resources they need for research, but this may also be a costly and inefficient solution.

Overall, option ii (establishing a patent system) is the best solution presented as it directly addresses the problem of inventors being unable to capture the full benefits of their innovations, and provides a clear incentive for them to invest in research.

Inventors in Developing Countries Are Usually Unable to Capture the Full