TRADE, SOCIETIES AND SUSTAINABLE
DEVELOPMENT SUSTRA NETWORK
Global Public Goods
Policy Brief Paper
Based on the conclusions of the SUSTRA seminar on “Global Public Goods and Trade”
13-14 May 2002, ENSA Montpellier ( France)
THE INCREASING IMPORTANCE OF
THE NOTION OF GLOBAL PUBLIC
GOODS
Unknown ten years ago, the concept of
global public goods has become a central
theme of discussion amongst researchers
and in institutions and negotiating fora
governing development, international
trade and the management of global risks.
Between 1999 and 2002, numerous
scientific papers on the subject were
published, and several international
institutions began to make substantial
contributions to the debate. After the
1999 publication of Global Public
Goods: International Co-operation in the
21st Century, a work which drew
considerable response, the UNDP’s
Office of Development Studies is about
to publish a second book devoted more
specifically to the supply of global public
goods1; while in 2001, the World Bank
published a report evaluating financing
mechanisms believed to contribute
directly to the conservation of global
public goods2. Subsequently, many
international development agencies began
to integrate the concept into their aid
programs3. Finally, France and Sweden
launched a ‘task force’ devoted to global
public goods in Johannesburg. Yet in
spite of this wave of enthusiasm, the
notion of global public goods is far from
being unified or stabilised, and the
concept is the target of virulent criticism.
THE ORIGIN OF THE NOTION OF
GLOBAL PUBLIC GOOD
Economists have traditionally defined
public goods as those goods whose
inherent characteristics in terms of nonexclusion4 and
non-rivalry5 make their production by the
private sector improbable. Market failure
therefore justifies state intervention to supply
and preserve such goods. Thus the questions
faced by public decision-makers are: what
public goods should the state produce? In
what quantities? And what financing
mechanisms should be established by the
state6?
Consideration of global public goods built
upon such questions. Thus global public
goods came to be understood as those
goods—or bads—with non-rivalrous and
non-exclusive features not only with regard to
individuals but also between different
populations and countries. The first global
public bads were identified in the context of
global environmental risks and 'externalities',
including, for example, the issues of global
warming, marine pollution and acid rain. The
maintenance of world peace and the
stabilisation of global financial markets were
later added to the list of potential global
public goods. In the context of global public
goods, it is thus increasingly acknowledged
that choices and actions in one country can
have consequences for the well-being of
populations in other countries, and that the
global public goods which contribute to
global welfare can only be produced by the
joint, co-ordinated action of several countries.
However, the absence of a legitimate world
government renders the centralised state
solutions recommended by public economics
impossible. The production and preservation
of global public goods instead requires that
countries co-operate. States must find joint
solutions to the institutional, economic and
political questions raised by the collective
identification of the priority global public
The SUSTRA network is financed by the 5th European Union framework programme Key Action "Improving the socio-economic knowledge base" - DG Research
Global Public Goods
goods and must work together to ensure their
provision.
THE ENLARGED DEFINITION OF
GLOBAL PUBLIC GOODS AND RISING
CRITICISMS
Departing from a fairly restrictive definition
of global public goods, a number of authors
have proposed to broaden the concept based
on the social construction of exclusion and
rivalry properties. From their perspective, the
'public' nature of the good is a socio-political
decision rather than an inherent quality of the
good. For them, the issue for public decisionmakers is not to compensate for market
failure but, on the contrary, to build the
conditions for non-exclusion and nonrivalry—not only between countries but also
between all citizens of the world. The UNDP
has moved in this direction with its ‘triangle
of publicness’ of a global public good: public
in consumption, in that everyone must have
access to the good; public in participation, in
that the political process through which the
good was developed included consultation
and dialogue with all stakeholders in an open
process; and public in the distribution of
benefits, in that everyone is entitled to benefit
from the good. Such a conception obviously
necessitates a radical change in the nature of
international co-operation. The objective is
no longer to set-up ‘exclusion’ devices in
order to establish a market value for a given
global public good, but to make ‘inclusive’ a
good that is not necessary inclusive in the
name of ‘the global general interest’.
What goods or services are potential
candidates for such treatment? Merit goods
(goods that are potentially private or
privatisable but that citizens are hesitant to
purchase as they do not directly perceive the
personal benefit—this is the case of culture
and education) have been put forward, as
have the essential goods and services related
to the fundamental rights defended by the
United Nations (access to water, to primary
education, to primary health care, etc.)7.
However, this approach has its detractors who
believe that the expansion of the concept of
global public goods results in the reduction of
the concept to a mishmash of economic
efficiency concepts and socio-political
considerations concerning equity and social
justice, thus losing its analytical rigor and
becoming a mere slogan. Other people
nevertheless defend the idea that the broad
acceptance of global public goods could
refresh the debate on multilateral cooperation, public aid for development and
international equity. Let us see to what extent
the notion can be instrumental in setting out
differently the questions of global
governance, the question of the links between
trade concerns and public services, and how
the concept can contribute to the formulation
of new solutions.
THE FORMULATION AND LINKING
OF COLLECTIVE PREFERENCES
Since global public goods cannot be supplied
without international co-ordination and cooperation, it is necessary to be able to identify
the collective priorities of joint efforts—in
terms of financing and changes in
technological orientation. Should we entrust
existing inter-governmental agencies with
this responsibility?
Can and should
international institutions be adapted to make
them more democratic, more transparent and
more open to non-state participation? Would
such a change be sufficient to ensure the
expression of the diversity of preferences and
create the conditions necessary for the
emergence of a consensus concerning the
ranking of global public goods? The
experience of the World Summit on
Sustainable Development in Johannesburg
unfortunately demonstrated that agreements
obtained within the official negotiation arena
are often only a reflection of the ‘smallest
common denominator’ of the participants and
remain marked by mutual suspicion, power
asymmetries, national interests and the
hegemony of economic justification.
However, the aggregation of preferences runs
the risk of establishing an equally
unsatisfactory consensus. Is it possible to
create more decentralised processes that
better respect the diversity of local
preferences? How, for example, can a
framework of co-operation and global coordination, which responds to the food
security concerns expressed by one
population without compromising the
Global Public Goods
conservation of biodiversity of another, be
developed?
The type II initiatives developed at
Johannesburg open the way for a new form of
action, combining NGOs, local communities,
public partners and private enterprises. They
demonstrate an innovative potential for the
development
of
economic
projects
participating in the production of global
public goods. They reveal the possibility of
new forms of co-operation less directly
dependent on states intermediation. The
success of such endeavours therefore leads to
a reconsideration of the conditions of
production of global public goods.
WHAT MECHANISMS FOR THE
SUPPLY OF GLOBAL PUBLIC
GOODS?
The debate over the modes of production of
global public goods concerns decisions on
effort-sharing rules and the control of freeriders—those who benefit from collective
action without bearing the costs. Centralised
production and decentralised production
represent two possible modes of production.
Centralised production at the international
level necessarily presupposes a supra-national
institution with legitimate powers to ensure
the enforcement of jointly-prescribed rules.
This solution has obvious limits: How can
this institution be given real authority when
there is no strong consensus concerning the
global public good that it is supposed to
produce? Can solutions come from a
strengthening of international law or from the
establishment of instruments of economic
retaliation? How could such an institution be
financed? Is it at the mercy of voluntary
contributions by states, or should a direct
system of international taxation be devised?
What system of state representation should be
established to prevent the control of the
institution by one or several hegemonic
states?
The other solution is the decentralised
production of the global public good, often
through the establishment of artificial ‘user
rights’ that can be bought, sold or exchanged.
This approach attempts to recreate a market
and the associated incentives in order to
encourage the production of public goods by
private agents. This is the approach employed
in the case of tradable fishing quotas for the
conservation of fishery resources, and
emission permits in the case of the
convention on climate change. This approach
allows better subsidiarity in the choices that
each country must make to encourage its
private actors to attain the objectives set and
hence better respect for local preferences.
In fact, each global public good requires a
search for the optimum combination of
centralised and decentralised solutions. For
example, if access to primary health care is
recognised as a global public good, the
creation of a world health fund that would
finance research on orphan illnesses and
manage vaccination campaigns should be
envisaged. But today solutions are also
directed towards better partnership with the
private sector pharmaceutical industries
through a reform of market structures and
intellectual property rights. They thus require
the renegotiation and adaptation of a number
of existing rules at the World Trade
Organization.
GLOBAL PUBLIC GOODS AND
GLOBAL GOVERNANCE – WHAT IS
EUROPE'S ROLE?
The debate on the identification of global
public goods and their production mode has
renewed questions concerning:
(1) the links between collective preferences,
international equity and international
democracy. It highlights again the need for a
better analysis of forms of subsidiarity that
can be built into the architecture of global
governance.
(2) the role of non-state actors in negotiation
and international co-operation;
(3)
the
increasing
significance
of
public/private partnership solutions which
require that trade regime rules be adapted.
These three themes are at the heart of the
debate on trade and sustainable development,
since they concern the way in which
governance
regimes
are
constructed,
legitimised and linked. If it succeeds in
becoming a common value, the notion of
global public good should contribute to
rethinking global governance, no longer
Global Public Goods
conceived of as the management of the
balance of power between potentially
competing regimes, but as the definition of an
integrated, complementary system of decision
at the supranational level.
What role can Europe play in redefining
global governance? The European Union was
successful in establishing a coherent policy
programme, overcoming the difficulties
associated
with
divergent
national
preferences. From this perspective, the
European Union plays the role of a true
institutional laboratory in which the notions
of subsidiarity, political superstructures and
horizontal management of cross-cutting
issues have been progressively refined.
Furthermore, Europe has been increasingly
aware of the necessity to re-regulate its
domestic markets in order to better integrate
sustainable development requirements. This
is where Europe could exert stronger
leadership: for example by negotiating
accompanying
measures
and
shared
production of global public goods as a central
component of free trade agreements with
third countries; by being more present in
discussions led by the international financial
institutions and by demonstrating its
willingness to impose at home what it
recommends for others.
1
Kaul I., Grunberg I., and Stern M.A. (1999)
Global public goods: International cooperation in
the 21st century. New York, Oxford University
Press, 546 pp. Publication of the second volume
entitled Providing Global Public Goods is planned
before the end of 2002. More information at:
http://www.undp.org/globalpublicgoods/TheBook/
2
World Bank (2001) Effective Use of
Development Finance for International Public
Goods. In Global Development Finance 2001.
Washington, D.C., Chapter V, pp. 109-135.
3
See in particular Severino J.M. (2001) Réformer
l’aide au développement au XXIe siècle. Critique
internationale, n°10, January, pp. 75-99.; Tubiana
L. and Severino J.M. (2002) Biens publics
globaux, gouvernance et aide publique au
développement. In Jacquet P., Pisani Ferry J. and
Tubiana L. Gouvernance Mondiale. La
Documentation Française, Les Rapports du CAE,
n°37, pp. 349-373.
4
The notion of non-exclusion is frequently
defined as the fact that it is impossible or
technically very costly to forbid access to a good
or service to those who wish to benefit from it.
This is the case of roads or street lights. It is
therefore difficult to make users pay a price.
However, in many cases, non-exclusion may also
mean that citizens do not have a choice: the
benefits of the public good are imposed on them
whether they want it or not. The eradication of an
infectious disease or the improvement of the
quality of the air benefits everybody. But the
production of a ‘public nuisance’ can harm
everybody. The property of exclusion or nonexclusion can evolve with technical progress. For
example, the transmission of television images
can now be encoded, thereby reserving viewing
rights for channel subscribers.
5
The notion of non-rivalry is associated with the
fact that consumption of the public good by an
agent does not prevent the consumption of the
same good by others. The good is said to be
indivisible or not destroyed by consumption. A
radio programme can thus be heard by an infinite
number of listeners. In certain cases, the effect
referred to as ‘congestion of use’ can affect the
property of non-rivalry. This is the case of a
congested road or a crowded beach. The term
impure public good is used when non-exclusion or
non-rivalry properties are not entirely present.
6
Replies to these questions are sought in public
economics. The initial historical contribution is
Samuelson P. (1954), ‘The Pure Theory of Public
Expenditure’, Review of Economics and
Statistics, 36:4, pp. 387-9
7
An international covenant on economic, social
and cultural rights adopted and opened for
signature, ratification and accession by the United
Nations General Assembly resolution 2200 A
(XXI) of 16 December 1966; it entered into force
on 3 January 1976.
Sophie Thoyer
FURTHER INFORMATION
Sophie Thoyer
Email : [email protected]
www.agro-montpellier.fr/sustra