GLOBAL PUBLIC GOOD (ENCYCLOPEDIA)

Abstract

Peace, climate change and ecosystem management, exploitation of renewable energy, international economic and financial stability are all "goods" whose production has a global public importance. The concept of Global Public Good has been developing since the sixties and even more in the last two decades, and it is now considered the new reference frame for global political and economic development as well as for international relations. In 1999 The United Nations Development Program defined these assets as public goods (therefore non-rival and non-excludable) whose usefulness crosses over national and regional boundaries and encompasses more groups of people not only with reference to geographical condition, but also under the socio - economic and generational perspective.

Historical context
The 15th and 16th centuries ushered in a new epoch in international relations, marked by the appearance of sovereign States in Europe as well as by the expansion of their colonial powers and trade links. However, in recent centuries, especially in the last decades, the amount of goods (or"bads") intentionally considered on a global range, has surged, often growing exponentially. The reasons are due to several factors:
- new technologies have increasingly enhanced human mobility as well as the movement of goods, services, and information around the world.

- Economic and political openness and the rise of diplomatic relations have provided a further impetus to cross-border transnational activity.
- Systemic risks have increased. The accumulating environmental degradation caused by human activities, involves many risks, including global climate change. Integrated financial markets pose the risk of boom - bust cycles. Growing socioeconomic inequities bring into question the legitimacy of the global governance system.
- International regimes, often run by small groups of powerful Nations claiming on universal applicability, are becoming more influential. Nations and groups have seen their public domains becoming intertwined and their living conditions interdependent. For example, an economic downturn in a major economy usually affects many others Countries through trade and investment links. Financial crises can spread from one continent to another one within few hours, often not sparing economies with solid fundamental variables either. New global public platforms, such as Internet, weaken the influence of many conventional public policy tools, including those for controlling problems, that is “public damages” such as tax evasion, money laundering, drug trafficking, commercial fraud and child abuse. The public and policy makers all over the world, increasingly find out that public goods, which they would prefer to have at a local level, cannot be produced solely through domestic action. A growing number of national public goods have gone global.

Definition

In order to fully understand the meaning of Global Public Good is necessary to analyse the concept of "public good" first. In fact, Global Public Goods may be considered as a particular type of public goods presenting the two public goods’ fundamental characteristics:
- Non - excludability: the impossibility or the extreme difficulty to exclude someone from the consumption of the good;
- The non - rivalry: the possibility that good has to be consumed simultaneously by many people. The consumption of a single individual has not to affect the possibility of consuming, at the same time, the same good by others.

However, a public good can take on a global character if it complies with the three important criteria, universally recognized and established by the United Nations Development Program in the late nineties :

- Geographical criterion;
- Socio – economic criterion;
- Generational criterion.

Therefore, the notion of global is not merely geographic, that is global as opposed to local, national or regional. On the other hand, it is multidimensional, including, besides the geographic dimension, also the sociological and temporal one.

Geographical criterion

Nation States represent important core elements of the international community and play crucial role in international relationships. Since the Peace of Westphalia in 1648, Nation States have enjoyed formal policy sovereignty and played a key role in shaping human activity - under the economic, social, cultural and political viewpoint- within their borders.1 For a variety of reasons and purposes, States form groups such as regional forums (for example, in Asia, Latin America, Sub-Saharan Africa or Europe), trade blocs (such as the North America Free Trade Agreement or South American Common Market, or Mercosur) defense alliances (such as NATO, the Nord Atlantic  Treaty Organization), and clubs (such as the OECD, Organization for Economic Cooperation and Development). The first requirement for a Global Public Good is that it covers more than one group of Countries. In fact, if a public good were only to apply to just one geographic region, Europe for instance, it would be a regional public good, and substantially a club good.

Socio- economic criterion

As the trend analyses of human development over the past 50 years have shown, socio-economic disparities are growing both between and within Countries. The rich are getting richer and the poor are getting poorer not only in terms of income, but also in many other respects, including access to knowledge, information and technology.

Being rich or poor is not a matter of being a citizen of a rich or a poor Country. On the contrary, wealth and deprivation coexist side by side, both in the poorest and in the richest Countries. Therefore, even though a public good has world-wide benefits because it is able to reach all Countries (or at least, a large number of Nations belonging to different country groups), its benefits may be accessible only to better-off population segments, marginalizing the poor further.

For instance, Internet, runs such a risk because it has a high access price (the costs of a computer, a telephone line, and sometimes the subscriber fee for the Internet service provider). Similarly, Global Public "Bads", such as malaria or tuberculosis, if left unaddressed, often hurt the poor more than the rich ones. This is because the poor ones may be unable to afford medical treatments and protection or because the only asset they can count on is often just their health and physical strength.

Generational criterion

The preceding two points suggest that ideally, humanity as a whole should be the beneficiary of Global Public Goods; but an individual’s life is limited. Therefore, it is fundamental to specify which generation we are referring to when we say “humanity”. For instance, the environmental movement reminds us of the importance of a long-term perspective. As argued in the Brundtland Commission’s report, “Our Common Future”, sustainable development is “development that meets the needs of the present without compromising the ability of future generations to meet their own needs”.2 Not only does this definition of sustainability apply to environmental debt (that is, the irreversible damages to natural resources), but also to finances and other forms of debt. Any type of collective borrowing from the future raises questions about intergenerational equity. Some authors, including Sandler, distinguish between intra - generational and intergenerational Global Public Goods, emphasizing how we have to deal with trade-offs between these two types of goods.3

Nuclear energy is a case in point: it can increase the availability of energy for present generations, but in the long run it will create nuclear waste. Hence the third qualifying mark of a Global Public Good is that it meets the needs of present generations without jeopardizing those of the future ones.

Typologies  

The table 1 classifies Global Public Goods primarily according to their human-made  properties (society).4 Global Public Goods are considered public in two senses: public rather than private, and global rather than national.



Quadrants 1 - 2A - 4A are referring to the “national domain”, while quadrants 2B – 3 - 4B to the “global public domain”.

Many decisions, on which it may prove it hard to reach consensus at the national level, such as on whether and to what extent to make certain goods public or private, must be made by Nations all together. 

The goods in quadrants 2 and 4 require a kind of harmonization of national policies. Policy harmonization is often intended to encourage Countries to internalize cross-border externalities by generating the positive ones while taking back the negative ones. Several goods in quadrant 2B involve efforts which aim at increasing the inclusiveness of such goods as international communication and transport systems in order to improve the worldwide availability of network externalities. The same intention usually drives initiatives to increase adherence to norms and standards, including human rights, and to foster respect for national sovereignty. Most of the goods in quadrant 2B are perceived by different national and transnational actors as global benefits. On the contrary, many of the goods in quadrant 4 involve the internalization of negative cross-border externalities. These types of externalities can be diffused in almost every Country, like the carbon dioxide emissions, which –  if combined – increase the risk of global warming. These externalities can originate just in some Countries, but potentially, they could spread worldwide, as with the outbreak of a new contagious disease. The political response to the negative externalities could be to establish an international regime that all Countries would be expected to comply with. The promotion of basic human rights, shown in quadrant 2B, is a good example. However, depending on the public good under consideration, alternative policy options might be preferable, as shown in quadrants 4A and 4B. Quadrant 4A lists goods with political responses that involve defining and assigning new (national) property rights, such as national pollution allowances.

Quadrant 4B includes goods involving measures similar to those of the national context and they aim at making certain crucial goods, such as basic education and health care, universally available. Moral and ethical concerns often motivate the international community to undertake such measures. Sometimes externalities have an important role too. For example, there might be concern that the potential global repercussions of failing States, because of conflicts and wars, could impose much higher costs in the future than facing today the root causes of political tension, such as the extreme poverty and inequity.

A further message, related to the pure public goods, is listed in quadrant 3.

As national borders become more flexible and cross-border economic activity increases, these goods turn into indivisible across borders or at transnational level. All Nations face the same international economic conditions in the international financial markets and they also cope with the same risk of global climate change. Because of this indivisibility, environmental sustainability is included in figure 5 as a global concern, so that Countries are encouraged to internalize the environmental externalities they do generate.

For this reasons, it is possible to develop a typology of Global Public Goods (table 2)5 which differentiates between goods based on the nature of their benefits and not on their aims (since they are all global), therefore, on their public dimension. Differentiating between the types of publicness associated to particular classes of Global Public Goods, sheds new light on some of the political tensions typical of globalization. It shows that in order to fully understand these types of tensions, it is necessary to analyze globalization not just within cross-border private economic activities, but also within what it is currently happening to goods in the public domain. International cooperation seems essential for global policy outcomes or conditions. For global man-made goods, the international community can count on a wider leeway in the pursuit of international cooperation. In addition, international cooperation can often take the form of more concerted national policy action. However, in order to achieve global policy outcomes or conditions and to outline the shaping of their indivisible benefits, it is often needed a truly widespread action raising all actors to the same level.6




Global Public Goods and Provision Problems


Considering now the problems related to these goods, one of the most critical aspects is related to their supply. The main anomaly concerns the problem of underproduction due to the phenomenon of free - riding. In fact, we have observed how the Global Public Goods, being a special category of public goods, are subject to non - excludability. It is not possible to exclude any individual from the consumption of these goods, so everyone has to generate positive externalities (that is, those effects that also people who have not contributed to the production of goods, can benefit from). People who benefit from a good without afford the costs involved, are consequentially called free - riders. Therefore, being the production costs allocated out of proportion among the recipients of goods, the production turns out to be too expensive and consequently it will be reached a production of a lower level than a socially optimal one. At the national level, this problem might be easily solved by moving the production of public goods from the private sector to the State which can get the necessary financing through public taxation. On the other hand, at the international level the situation is certainly more complicated7 because the State owns the authority to impose on citizens its fiscal decisions. But currently, with regard to Global Public Goods, there are no institutions, international speaking, able to exercise the necessary authority to efficiently regulate the system of production costs for these goods. For this reason, in the management of Global Public Goods’ production costs, there are two different prospects: either the States give up part of their sovereignty in favor of international institutions with coercive powers, or they decide to align their economic policy guidelines and follow the way of international cooperation.

Global Public Goods and Globalization

Globalization is often associated with increased privateness thanks to the liberalization of the economy, which allows to move more goods and services into markets, fostering integration of international markets and encouraging private cross-border economic activity as trade, investments, transport, travels, migration, and communication. These are certainly important characteristics of globalization.

Globalization also concerns with the increase in the  public aspects about people’s lives, which are becoming more interdependent. Events in one area of the globe often provoke repercussions all around the world. A growing collection of international policy principles, norms, treaties, laws and standards, is defining common rules for an ever-wider range of activities. We may think about the many international agreements on some global concerns such as the maintenance of peace and security, the control over terrorism and drug trafficking, the prevention of the risk of global climate change, the fight against the spread of communicable diseases or the construction of global communication and transportation networks. These concerns all deal with the provision of public goods whose benefits or, the costs in the case of public “bads,” cut across the national borders proving that many national public goods have turned global. Globalization and Global Public Goods are different, but still inextricably linked concepts. In fact, the way in which Global Public Goods are provided determines whether globalization is to be considered as an opportunity or as a threat.

Since that Global Public Goods are public goods with benefits (or costs, in the case of such "bads" as crime and violence) that reach out Countries and regions, involving both rich and poor populations and different generations too, it can be stated that to some extent, Global Public Goods and "Bads" can be considered as a result of globalization. For example, as financial markets become integrated, a financial crisis that would have once hit just a Nation, could now turn out to be an international one if not carefully managed from the very beginning. We can provide a lot of examples such as Mexico’s “tequila” crisis in 1994–95, East Asia’s financial crisis in 1997–98, the Russian Federation’s debt default in 1998, and more recently, the Greece financial crisis. Nevertheless, Global Public Goods are also important driving forces of globalization.

The international civil aviation system is a case in point. Airplanes could not travel around the world as swiftly and safely as they do without carefully harmonized national civil administration services and infrastructures. Managing globalization depends largely on providing Global Public Goods.8 While the link between globalization and public goods has rarely been explored, globalization is being contested above all when people feel overwhelmed and even attacked by goods or, more often, by "bads" of public domain, including contagious diseases, financial meltdowns, ecological calamities, and computer hacking. These "bads" tend to affect people indiscriminately. Because of these conditions, individual and national political responses are often ineffective. As a result many people around the world share a sense of widespread uncertainty and sometimes even a loss of the personal security.9

Perceptions of globalization vary across population groups, but they also vary according to the Global Public Good and it can be said that discontent about globalization often arises from the ways in which Global Public Goods are, or are not, provided.
There are growing expectations among Countries for a fair and participatory supply of public goods, because they should affect the population as a whole. .

In fact, the protests against globalization could be interpreted as a demand for a better provision of Global Public Goods, so that globalization may also be one day, an opportunity for bettering and enriching the lives of everyone. 

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1The Peace of Westphalia was a series of peace treaties signed between May and October 1648 in Osnabruck and Munster. These treaties ended with the Thirty Years’ War (1618 – 1648) in the Holy Roman Empire, and with the Eighty Years’ War (1568 – 1648) between Spain and the Dutch Republic when Spain formally recognized the Dutch independence.
2http: //www.un-documents.net/wced-ocf.htm.
3Corner T. and T. Sandler, (1993), Private Provision of Public Goods under price uncertainty, in Social Choice and Welfare, Vol. 10, No. 4, p. 375.
4Kaul I, P. Conceiçao and R. U. Mendoza (2003), Providing Global Public Goods: Managing Globalization, New York, Oxford University Press.
5Ibidem.
6Sandler T. (1998), “Global and Regional Public Goods: a Prognosis for Collective Actions”, Fiscal Studies, Vol. 19, No. 3, pp. 221-247.
7Musgrave R. A. and P. B. Musgrave (2003), Prologue in Providing Global Public Goods: Managing Organization, Oxford University Press, p. 12.
8Kaul I, P. Conceiçao and R. U. Mendoza (2003), op. cit.
9Held D. and A. McGrew (2007), Globalization/Anti Globalization, Polity Press, p. 90.


Bibliography
Corner T. and T. Sandler, (1993), “Private Provision of Public Goods under Price Uncertainty”, in Social Choice and Welfare, Vol. 10, n. 4, p. 375.
Held D. and A. McGrew (2007), Globalization/Anti Globalization, Polity Press, p. 90
Kaul I, P. Conceiçao and R. U. Mendoza (2003), Providing Global Public Goods: Managing Globalization, New York, Oxford University Press.
Musgrave R. A. and P. B. Musgrave (2003), Prologue in Providing Global Public Goods: Managing Organization, Oxford University Press, p. 12
Sandler T. (1998), “Global and Regional Public Goods: a Prognosis for Collective Actions”, Fiscal Studies, Vol. 19, No. 3, pp. 221-247

Ediotr: Francesca BERTI