This paper evaluates the welfare consequences of implementing intellectual property rights in developing countries. The protection of intellectual property in poor countries promises to increase world innovation, but this would not come without costs. Higher prices for consumers in that part of the world are the negative side of this policy.
We present a general equilibrium model with two regions (the North and the South) to compare these two effects. Our main contribution is to show that the results will depend on the difference in economic development (represented by labor productivity) between the two regions. The South might suffer a net welfare loss if its productivity level is very low with respect to the North.