The "up" side is clear.
IP piracy gets you stuff for free. Or for the cost of reverse engineering it which is very often drastically less than the cost of a license, and nearly always less than the cost of producing equivalent IP on your own.
Additionally, for countries at least, any negative consequences are very likely to be delayed, possibly fall on people other than those doing the piracy or those getting the benefits, and possibly may be avoided completely.
The "down" side is comes in two forms.
First, some direct punishment is possible, at least in theory.
There are some international agencies that try to do something about IP theft. These may attempt to levy fines, exclude certain groups or countries from participating in certain meetings or treaties, and various other such items.
If the IP theft is large enough, various governments may get involved. This may produce such things as sanctions, banning of certain products from countries that don't police IP or companies that don't respect IP, black lists such that certain persons cannot get visas, and so on. As one example, if a company is sufficiently blatant in IP theft, its employees may get imprisoned if they visit a country that has become upset about the IP theft.
The producers of the IP also make some attempts to hamper the theft. Unregistered software may not work correctly, for example. There are other possible things such software could do, but I will not list them since I do not want any possibility of appearing to condone them. But pirated software has lots of possible drawbacks.
Pirated software does not come with support. You can't call the 1-800 number to get help with your software if your software was copied.
Another possible type of drawback is reputation damage. If a country is well known to steal IP then companies and other countries may withdraw from trade with the pirate. Whether or not that happens, and whether or not it is persuasive to the pirate, will have very many complicating factors. For example, a developing country with lots of agriculture but not much cash, may think it is better to steal a million copies of MS Windows and accept the hit to their reputation. In comparison, an indistrialized nation with a large fraction of their economy in exported goods may find the reputation damage is far more costly than the price of the software they could steal.
Another aspect of reputation damage is exclusion from information sharing. Consider the recent COVID pandemic. If a country is a severe pirate of bio IP, it may be excluded from accessing data regarding such bio IP. That may mean they cannot get such things as data bout the virus to help them with testing, vaccine distribution and administering, and related items.