Talk About Free Riders!

"[London]'s congestion pricing for drivers is heralded around the world for reducing traffic and pollution. It's also causing an unintended effect: a sharp jump in thieves stealing or counterfeiting license plates. Thieves are pinching plates by the dozens every day to fool the city's traffic cameras, which enforce the £8 ($16) daily charge to drive in central London as well as other traffic infractions."

- Niraj Sheth, Wall Street Journal, Friday 11/02/07, B1

An unfortunate, but acceptable byproduct of good policy? Or evidence that congestion pricing is merely a tax that clever drivers will find away around? These are important questions to consider as policy successes make their way around the world.

The Economist: Innovation helps poor and rich countries alike

The latest issue of the Economist features a special report on innovation and the global economy which is well worth a look. In it you will read about the efforts of India's Tata motors to produce a $3,000 "people's car" and small biotech firms that are figuring out ways to produce generic drugs without trampling on Western patents.

"With manufacturing now barely a fifth of economic activity in rich countries, the “knowledge economy” is becoming more important. Indeed, rich countries may not be able to compete with rivals offering low-cost products and services if they do not learn to innovate better and faster. But even if innovation is the key to global competitiveness, it is not necessarily a zero sum game. On the contrary, because the well of human ingenuity is bottomless, innovation strategies that tap into hitherto neglected intellectual capital and connect it better with financial capital can help both rich and poor countries prosper. That is starting to happen in the developing world."

Click here to read about how so-called "open innovation" is transforming the corporate attitude toward intellectual property rights (in the public realm this is often referred to as "policy transfer").

See this graph for a nifty visual of the relationship between innovation, labor, capital and productivity growth in the US.