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Privatising The Production Of Knowledge: Promise And Pitfalls For Agricultural Research And Extension

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  • Lindner, Robert K.

Abstract

In the absence of some form of government intervention, knowledge is a classic public good which will be under-produced because of lack of price excludability. Government intervention may take the form of establishing intellectual property rights, or other means of shielding knowledge-based innovations from imitation or copying. Such intervention offers the prospect of 'privatising' the production of knowledge in the sense that a certain level of private knowledge production may become profitable if producers can appropriate at least part of the benefits of R&D. However, publicly funded R&D or extension still can 'crowd out' private knowledge production by charging lower prices. The principal finding of this study is that such 'crowding out' behaviour may be efficient in the sense of being potentially Pareto superior even if it is at the expense of public funding for so called 'orphan' areas of knowledge production which are privately unprofitable. The reason why conventional conclusions about privatisation and 'crowding out' of private goods need not apply to rural research and extension is that private goods are both rival in consumption and price excludable, while knowledge is intrinsically non rival in consumption even if it can be made price excludable.

Suggested Citation

  • Lindner, Robert K., 1993. "Privatising The Production Of Knowledge: Promise And Pitfalls For Agricultural Research And Extension," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 37(03), December.
  • Handle: RePEc:ags:ajaeau:22736
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    File URL: http://purl.umn.edu/22736
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    References listed on IDEAS

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    1. Brennan, Geoffrey & Walsh, Cliff, 1981. "A Monopoly Model of Public Goods Provision: The Uniform Pricing Case," American Economic Review, American Economic Association, vol. 71(1), pages 196-206, March.
    2. Geoffrey Brennan & Cliff Walsh, 1985. "Private Markets in (Excludable) Public Goods: A Reexamination," The Quarterly Journal of Economics, Oxford University Press, vol. 100(3), pages 811-819.
    3. Ross Williams, 2006. "Introduction to the Policy Forum," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 39(4), pages 409-411, December.
    4. Burns, Michael E & Walsh, Cliff, 1981. "Market Provision of Price-excludable Public Goods: A General Analysis," Journal of Political Economy, University of Chicago Press, vol. 89(1), pages 166-191, February.
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    Cited by:

    1. Hu, Ruifa & Cai, Yaqing & Chen, Kevin Z. & Huang, Jikun, 2012. "Effects of inclusive public agricultural extension service: Results from a policy reform experiment in western China," China Economic Review, Elsevier, vol. 23(4), pages 962-974.
    2. repec:eee:ecanpo:v:54:y:2017:i:c:p:96-104 is not listed on IDEAS

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