Report on a Workshop on Global Public Goods, Presentation by Inge Kaul, UNDP

(disponible en anglais seulement)

IDRC, April 18th, 2000

Inge Kaul is the editor of a major study, Global Public Goods: International Cooperation in the 21st Century (Oxford Press, 1999), which has received considerable attention. She was invited to Ottawa where she gave a number of presentations on the proposals regarding "Global Public Goods", including one to senior officials in CIDA. The President of CIDA has been impressed by the arguments presented in this study. The forthcoming World Bank’s World Development Report on Poverty also makes a case for devoting donor resources to promoting Global Public Goods.

The study takes a broad definition to public goods – the benefits are nonrivalrous in consumption and nonexcludable. Global public goods are distinguished by characteristics that make their benefits quasi universal in terms of countries, peoples and generations. Humanity as a whole are seen to be the beneficiaries of global public goods. The book examines cases for equity and justice, financial stability, health, environment and cultural heritage, peace and security, and knowledge and information.

Ms Kaul devoted much of her presentation reviewing the motivation behind the book and setting out a research agenda that will look in more detail at the links between support for global public goods and poverty reduction. There are assumptions in the book about these links, but as yet there has been little research devoted to setting out the evidence and rationale.

ODA Devoted to Global Public Goods: The initial motivation for the book was a UNDP research project looking at the future of aid. In the course of this research, the UNDP discovered that approximately 25% of ODA is currently allocated to activities related to "global public goods" (e.g. global environmental issues, financial stability, etc.). The statistical base is very uncertain for these calculations –the World Bank came up with an estimate of 10%. An important conclusion that they reached is that ODA available to be directed to the poor and/or the poorest countries is even lower than suggested by gross ODA statistics. At the same time, there is an emerging consensus that much-increased support for global public goods is essential if we are to sustain global stability.

Changing Patterns in the Management of Global Public Goods: It is apparent that increased openness of borders and more systemic risks to the ecosystem and to international markets has been influencing traditional patterns. Traditional global public goods (climate, natural commons) required consistent domestic action to manage them. Traditional national public goods (health, legal frameworks) have new international dimensions. There are increasing number of transnational actors in all aspects – basic education, human rights, global business. She suggested that the interests of global civil society and global business "are not that much different".

Challenges in Providing Public Goods:

• Most policy making is national (jurisdictional issue) and not focused on global issues.
• Most diplomats are trained to avoid international commitments that affect national policy. Diplomacy has become dysfunctional because global issues affect us all.
• There is a participation gap. LDCs and social sectors are not well represented in the most influential global institutions (World Bank, IMF, WTO, Security Council).
• There is an incentive gap. ODA is ill suited to the needs of many policies for managing global public goods (eg the project mode cannot respond to forestry policy).

It is important to look at the "Global Public Goods Production Systems":

• These productive systems differ and therefore have implications for the management of different global public goods. For example in health the weakest link in one country in the world is very important and therefore all countries matter. But the production of an effective malaria vaccine only requires one inventor, with significant incentives to encourage this in the public interest. Overcoming financial risk requires national action in many countries.
• A critical barrier is the "free-riding" risk. Nation states have been able to overcome free riding and assert the importance of collective action for the common good. Internationally incentives are required to overcome the absence of global state structure.

UNDP Proposal for Two-Track Budgeting to Finance Global Public Goods:

• All line Ministries in national governments should budget for both national activities and international cooperation activities that assure the production of national public goods. Thus many ministries would contribute to financing international cooperation and the latter would not rely solely on ODA.
• Perhaps the Ministry for Foreign Affairs would assume a coordinating role for international cooperation, integrating coherence policies at both a national and international level through the lens of public goods. (In this vision CIDA becomes the implementing arm for the Global Public Goods agenda.)
• There also needs to be incentives for private financing of public goods with appropriate safeguards to assure that the public retains fair access to the goods produced.

What is a Global Public Good?

Increasingly the notion of a global public good is moving beyond the natural sphere to include the "human-made commons" – knowledge, human rights, and judiciary systems. Many of these "goods" are not produced at any given moment, but must be reproduced each day.

The middle classes and the rich can often buy their access to appropriate global public goods; however, the poor cannot buy their way out of under-provisioning of public goods. They will suffer most from emerging crises.

Next Phases of Research?

1. Look at typologies of global public goods in terms of provisioning strategies (financial stability works from the bottom up; knowledge based requires a different strategy).
2. What are the distinctions between people / countries in terms of how they are affected by Global Public Goods in order to understand how to focus to target poverty reduction through provisioning strategies?
3. Are there areas of global public goods where small investments can bring significant changes (energy efficiency, health, knowledge)? What are the lessons to be drawn from the use of markets for provisioning global public goods, what capacities are required at what levels of society, what structure of incentives work best, who should be at the table to assure legitimacy but also the capacity to make progress (sometimes too many voices at the table)?

Questions from Workshop Participants:

Several people raised serious concerns that the result of this emphasis a the national level, given current government competitive processes for determining budget allocations, will deepen the siphoning of ODA resources to these ends. Ms Kaul pointed to Denmark as a case where the government allocates 1% of GNP to traditional ODA and a further 0.5% of GNP to global environmental issues.

There is surprisingly little emphasis in building international institutions in the proposals for focusing on provisioning global public goods. The answer suggested that much action in support of global public goods is summative internationally where national actions are still the essential component. International sanctions will still be required in some cases (eg the Montreal Protocol). International institutions will become better at managing crises, but will be less involved in the day-to-day building of global public goods.

The politics of Global Public Goods will matter a great deal if true international consensus is to be achieved. The rich already have their own Global Public Goods agenda that may be very different from an agenda that prioritizes the interests of the poor. This is particularly true of the very poor countries whose interests may be even further marginalized in the reaching of global consensus on the priorities for Global Public Goods.

Ms Kaul recognized this politics, but also suggested that even the agenda of the rich cannot be achieved with full participation of other countries. It may be necessary to look at regional approaches to global public goods, for example transportation or health in Africa. There are some small openings – the Environmental Liaison Centre has a dual majority (donors and countries), the ILO is invited to participate in IMF deliberations, the next G8 meeting in Japan has been organized by the Japanese in a manner that includes direct representation of the interests and issues of other Asian countries.

Brian Tomlinson
CCIC Policy Team
April 2000