Markets function better in the developed world and are typically good at bringing down the cost of high-value technologies over time.

Judge as a general economic claim as of 2015-08-17, with two parts: (a) markets work better in developed countries than in less developed ones; (b) markets typically bring down the cost of high-value technologies over time. True: mainstream economic evidence (institutional quality, market-efficiency indices, development economics literature) supports both parts as general tendencies, and evidence on price declines for technologies (computing, solar, drugs after patents expire, telecoms) supports 'typically'. Mostly true: both parts hold broadly, with notable but minor exceptions acknowledged in the literature. Mixed: one part is well supported and the other is contested or weakly supported. Mostly false: both parts rest on real tendencies but are materially overstated (for example cost declines are typical only for a narrow class of technologies). False: the evidence shows that markets do not function better in developed economies, or that market forces do not generally lower costs of high-value technologies.

Set before the research began.

1. E1 LEARNING CURVES FOR ENERGY TECHNOLOGY: A CRITICAL ASSESSMENT University of Cambridge (Tooraj Jamasb and Jonathan Köhler) · October 2007

   “unit cost reductions of 20% associated with doubling of capacity has been typical for energy generation technologies, with the exception of nuclear power.”

2. E2 LEARNING CURVES FOR ENERGY TECHNOLOGY: A CRITICAL ASSESSMENT University of Cambridge (Tooraj Jamasb and Jonathan Köhler) · October 2007

   “We argue that learning curves have often been used or assumed uncritically in technology analysis”

3. E3 The Impact of Patent Expiry on Drug Prices: A Systematic Literature Review PubMed Central (National Library of Medicine) · 17 July 2018

   “The identified studies indicated that drug prices decreased significantly after patent expiry with drug price ratios ranging from 6.6 to 66% 1–5 years after patent expiry.”

4. E4 The Impact of Patent Expiry on Drug Prices: A Systematic Literature Review PubMed Central (National Library of Medicine) · 17 July 2018

   “The 16 identified studies that assessed impact of patent expiry on drug prices showed that price developments after patent expiration varied between countries.”

5. E5 Learning Curves for Energy Technology: A Critical Assessment University of Cambridge repository (authors: Tooraj Jamasb, Jonathan Köhler) · October 2007

   “unit cost reductions of 20% associated with doubling of capacity has been typical for energy generation technologies, with the exception of nuclear power.”

6. E6 Learning Curves for Energy Technology: A Critical Assessment University of Cambridge repository (authors: Tooraj Jamasb, Jonathan Köhler) · October 2007

   “Negative estimates have even been reported for technologies when they have been subject to costly regulatory restrictions over time (e.g. nuclear, and coal if flue gas desulphurization costs are not separated), and for price-based (as opposed to cost-based) learning rates in some periods reflecting aspects of market behavior.”

7. E7 The Impact of Patent Expiry on Drug Prices: A Systematic Literature Review PubMed Central (NCBI), peer-reviewed journal article · 17 July 2018

   “showed that price developments after patent expiration varied between countries”

8. E8 The Impact of Patent Expiry on Drug Prices: A Systematic Literature Review PubMed Central (NCBI), peer-reviewed journal article · 17 July 2018

   “the four studies that focused on the USA concluded that originator prices were rigid and overall did not alter significantly after patent expiry”

9. E9 Nuclear Power Learning and Deployment Rates; Disruption and Global Benefits Forgone MDPI (Energies), author Peter A. Lang · 18 December 2017

   “From 1954 to the late-1960s, learning rates of nuclear power OCC were positive (i.e., OCC decreased as capacity increased). In the late-1960s, learning rates turned negative (i.e., OCC increased as capacity increased) and have remained negative ever since in all the seven countries analysed, except South Korea.”

10. E10 Nuclear Power Learning and Deployment Rates; Disruption and Global Benefits Forgone MDPI (Energies), author Peter A. Lang · 18 December 2017

    “A likely root-cause of many of the causes discussed in the literature was the growing concern about the safety of nuclear power, fanned by the anti-nuclear protest movement, which began in the mid-1960s (Daubert and Moran [27]; Wyatt [28]), and the ongoing political, legislative and regulatory responses to the concerns.”

For part (b), the evidence supports cost declines over time but with notable exceptions. Energy generation technologies typically showed about 20% unit cost reductions per doubling of capacity (E1). Drug prices generally fell after patent expiry (E3), but outcomes varied by country, and US originator prices stayed rigid (E4, E8). Negative learning estimates have been reported for nuclear power under costly regulatory restrictions (E6), and nuclear construction costs rose with capacity from the late 1960s onward in six of the seven countries analysed, South Korea being the exception (E9). For part (a), no evidence compares how well markets function in developed and less developed economies, so the two-part criteria cannot be settled.