the institutional economics of sharing biological resources and information an introduction to the...
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The institutional economics of sharing biological resources and information
An introduction to the economics of the life science commons
Tom Dedeurwaerdere (FNRS/UCL)
Director of research atCentre for the Philosophy of
LawProfessor of Philosophy at Université catholique de
Louvain18th may ESNIE Cargèse
1.1. Introducing the concepts Assumptions Role of institutions Static efficiency (transaction cost economics)
Bounded rationality and opportunistic behaviour Preferences are given and known Alignment of the economic coordination structures to the transaction situation
Optimisation of transaction costs through the (ex ante) definition of property rights and (ex post) supervisory mechanisms ensuring cooperative behaviour
Dynamic efficiency (evolutionary economics, evolutionary game theory, etc.)
Bounded rationality and opportunistic behaviour (no fixed cognitive framework on solutions) Evolving distribution of preferences (no fixed preferences) Co-determination of political environment and economic coordination structures
Sustaining the dynamics of innovation and adaptation
acquisition of new knowledge (institutional adjustement) and
enforcement of norms of cooperation (institutional embedding)
in order to maximize the future possibilities of development
1.2. Introducing the field of investigation : global public goods
The intrinsic properties of goods:
a conventional approach to public goods
Excludable
NonrivalRival
PRIVATE GOODS
Examples:
• Milk
• Land
• Education
CLUB GOODS
Examples:
• Noncommercial knowledge (such as the Phytagorean theorem)
• Norms and standards
• Property rights regimes
• Respect for human rights
COMMONS PUBLIC DOMAIN
PURE PUBLIC GOODS
Examples:
• Moonlight
• Peace & security/conflict
• Efficient/inefficient markets
COMMON POOL RESOURCES
Examples:
• Atmosphere
• Wildlife
Nonexcludable
The economics of the life science commonsTom Dedeurwaerdere
2. Dynamic efficiency for biodiversity governance
Focus of this section: critical evaluation of alternative mechanisms of regulation proposed in the ongoing negotiations on ABS
Current mechanism
Incentive for innovation through intellectual property rights for the users of the genetic resources in the plant breeders and pharmaceutical industry
Protection of the provider’s right through clauses of Prior Informed Consent and Access and Benefit Sharing in the contract
Hypothesis : Double innovation in the proposed measures
(reference : Institute of Advanced Studies of United Nations University, 2003)
Developing an action on the innovation potential of the whole production chain
Developing an action on the maximization of future options of development, beyond the question of allocation of existing resources.
The economics of the life science commonsTom Dedeurwaerdere
2. 1. Static efficiency : Reducing opportunistic behaviour through an appropriate institutional environment
(Oliver Williamson, Douglas North)
Example of Merck-InBIO (Costa Rica)
(-) low direct financial incentives (-) high transaction costs establishing the InBIO research agency (+) helps building dynamics of confidence and reputation, within a nexus of agreements : bio-
prospecting, dept-for nature swaps, reform of park agency in conformity with UNESCO’s man and biosphere program
(+) centralisation of information (InBIO), which facilitates definition of the contractual relation
Governance attributes
Incentive Intensity Administrative Control Contract Law Regime
(Direct incentives) (Indirect incentives) (Indirect incentives)
Governance Structures
Spot Market
Hybrid
Hierarchy
++
+
0 ++
0
+
++
+
0
2.2. Towards dynamic efficiency2.2. Towards dynamic efficiency2.2.1. Documenting the flow of resources through 2.2.1. Documenting the flow of resources through
the entire innovation chainthe entire innovation chain
Product Development
Genetic screening
Local users communities
Ecosystems that produce diversity
2.2.2. Evolutionary character of the biological resourcesTom Dedeurwaerdere
Susceptibility of Wheat Varieties as a Function of Usetime
AUD
3 02 01 00
1 4 0 0
1 2 0 0
1 0 0 0
8 0 0
6 0 0
4 0 0
2 0 0
0
- 2 0 0
O b s e r v e d
L i n e a r
Source: Singh and Rajaram 1991
Years 10 20 30 Years
2.3. Examples of institutions for enhancing dynamic efficiencyTom Dedeurwaerdere
a. The problems with static efficiency
Autonomous dynamics of natural evolution of the genetic resourcesIncremental character of the decision process
b. The reaction of the law
From a simple adaptation within the existing static conception
shortening the patentsmultiplication of specific regimes for each sector of activity
To a dynamic conception
liability rules (Reichman)conservation funds (Swanson)
The economics of the life science commonsTom Dedeurwaerdere
C. Dynamic efficiency of norms of cooperation
ethical codes of conduct
MOSAICC : Microorganism Sustainable Use and Access RegulationRoyal Kew Gardens LondonGlaxo Welcome, Novo Nordisk, Xenova, Shaman Pharma, Bristo-Myers Squibb
voluntary mechanisms of benefit sharing
d. Dynamic efficiency of generation of knowledge
International system for the monitoring of the flow of genetic resources
Harmonisation of procedures of prior informed consent and mutually agreed terms
3. Dynamic efficiency for the life science knowledge commons
Flow of ideas
Example Participation to a global biological information archive
Positive incentives
Visibility, public recognition, instantpublication
Perverse incentives
Under-use
Flow of artefacts
Participation to the exchange of tumour tissue data
Access to first hand high quality info related to the data
Misuse : use of the data for commercial purposes
Facility (info system)
Common web server for storing images
On line verification of the diagnosis
Pollution : storing redundant information without appropriate checking
Components of the microbiological information commons
Well-defined property rights
• help to reinforce a long term perspective in the management of a resource
• help to stimulate investment in the design of new institutional rules that can cope with these problems
Reference : Schlager and Ostrom, North, Demsetz
3.1. Static approach to intellectual property rights
3.1. Static approach to intellectual property rights
a) Role of property rights regimes
However :
• Well-defined property rights do not necessarily imply full ownership, nor a fortiori private ownership : Bundle of Use and Decision rights
Access
Removal, extraction, withdrawal
Management
Exclusion
Alienation
Use rights
Collective choice rights
• The consequences of a set of property rights will depend on the cost and the availability of institutional arrangement that specify the exercise of the rights
PROPERTY RIGHT REGIME
+
INSTITUTIONAL ARRANGEMENT
(Contracts, legal rules,
administrative control)
PROPERTY RIGHT REGIME
+
INSTITUTIONAL ARRANGEMENT
(Contracts, legal rules,
administrative control)
OUTCOMES
a) Institutions for data sharing : from the GBIF model…
Other open science users
Data Providers and Data Participants
Data User Agreement
GBIF Collaborative database
Data Sharing Agreement
b) to a two tiered system I :based on the transfer of property to a collective licensing organization (GBIF model and Free software model)
c) or a two tiered system II : based on a multilateral agreement on contractual templates (proposed in Reichman and Uhlir, 2003)
Licensing negotiation
Copyleft license
Ex ante negotiation of the contractual template
Third party
Other open science users
Commercial licenseCommercial
firm
Proprietary R&D
KeyData
• static conception of efficiency : optimal allocation of existing institutional resources under given transaction situation (e.g. uncertainty, frequency of transactions)
• dynamic conception of efficiency : acquisition of new knowledge and enforcement of norms of cooperation in order to maximize the future possibilities of development– design rules for creating a dynamic decision space : focus on
enforcing informal norms as relational networks (Elinor Ostrom)– identifying deadlocks for creating permanent learning processes :
focus on the organisation of a dynamic interaction between rules and beliefs (Douglas North, Peter Haas)
3.2.. Towards a dynamic framework
3.2.. Towards a dynamic framework
Comparing configurations of rules, norms and outcomes
Case study on: * The Free Software Foundation (FSF) and *The Creative Commons (CC)
3.2.1. Dynamic efficiency of cooperative norms as relational networks
I. Rules
Case of FSF : (1) The intellectual property is transferred to a collective actor (the free software foundation) or remains with the author (2) There is a restricted set of some agreed upon licenses that are used by the FSF or the author of the free software (mainly variants upon the GNU General Public License)
Case of CC : (1) a menu of license provisions, the copyright remaining with the authors (2) goes beyond current property rights practice, providing restrictions of use, not providing positive prescriptions, such as the share alike provision
II. Norms
Case of FSF : (1) a homogeneous group (2) a collaborative project creating a sense of community (through motivation) ; so reducing attempts to abuse and encouraging collaboration in enforcement reports
Case of CC: (2) a heterogeneous group (p. 61) (2) a social statement, but no sense of community using in a certain way a creative work
III. Outcomes
Case of FSF : (1) widespread international adoption (2) law suits already took place
Case of CC : (1) difficult to translate to the different national contexts (2) no legal enforcement up till now
Reference : Research Libraries Group and the Online Computer Library Center report (2001)
(1) audibility, security, and communication;
(2) compliance and conscientiousness;
(3) certification, copying controls, and following rules;
(4) backup policies and avoiding, detecting, and restoring
lost/corrupted information;
(5) reputation and performance;
IV. Towards the definition of design rules for data sharing
(6) agreements between creators and providers;
(7) open sharing of information about what it is preserving and for whom;
(8) balanced risk, benefit, and cost;
(9) complementarity, cost-effectiveness, scalability, and confidence; and
(10) evaluation of system components.
Comparing interaction processes between rules and beliefs
Case study on:
*The Global Biodiversity Information Facility (GBIF) and
*The Global Taxonomy Initiative (GTI)
3.2.2. Dynamic efficiency of knowledge generation
I. Interaction between rules and beliefs
Case of GBIF (1) Developed common concepts amongst the bio-informatics and conservation community (2) Institutional mandate to the GBIF secretariat to elaborate new working programs (3) GBIF secretariat as an autonomous legal entity
Case of GTI (1) ad hoc learning process, no mandate for an overall evaluation of the new stakes (2) depends on the CBD secretariat
II. Outcomes
Case of GBIF (1) implementation of different action
plans (2) enlargement of the type of actors : communicating data on bird counting in New-York and Berlin through GBIF
Case of GTI (1) no action plan has been defined (2) deadlocks of negotiations
Bottlenecks (Peter Haas, Douglas North)
• Absence of an institutional mandate for a learning process
• Dependency of the learning community from the policy making community
• Capture off the learning process by vested interests
III. Towards the identification of deadlocks of the learning process
4. Conclusion : Towards a “two pillar” model:
4. Conclusion : Towards a “two pillar” model:
Enhanced data sharing in the microbiological commons
Implementing optimal institutions in a static
framework (allocative efficiency)
Maximising future possibilities in a
dynamic framework (dynamic efficiency)
EBRI : Institutional framing for information sharing in Microbiology
Epistemic communitymandate
reporting
Operational outcomes
• Project proposals
• Input to the policy process
• External collaborative schemes
Stock taking
Institutional analysis
Stakeholder evaluation
Reflexive outcomes
•Common knowledge base
•New concepts
•Enhanced capacity for self-governance
…
IUAP V/23