Global Public Goods: International Cooperation in the 21st Century

Dr. Catherine Gwin, Senior Vice President, Overseas Development Council

Global Public Goods, edited by Inga Kaul and her colleagues at UNDP, is an important book. It takes a concept that for centuries has been part of the economic theory, and discourse of government and extrapolates it to the international realm. One might even say that its title is worth a thousand words.

In making that extrapolation, the book echoes the plethora of writing of the past 10 years that has emphasized the point that we live in an increasingly integrated and interconnected world; that the divide between the national and international realm is a rapidly evolving one; that there is a new mix of actors influential at the international level; and that there are a growing number of problems whose effects spillover national borders and whose solutions require more than what individual countries can achieve acting alone.

But this book then goes far beyond that literature, in making its main point. The point, in brief, is that, under present circumstances, there is an increasingly serious under-supply of what can legitimately be called "global public goods;" and that international cooperation in the 21st century needs, therefore, to be more purposefully and more intensively pursued to respond to that under-supply. This is a need, which, in turn, calls for new instruments and new arrangements to overcome the classic "public goods" problems of collective action -- a challenge made more difficult at the international level by the underdevelopment of institutions of global governance.

I don't intend to comment further on the broad messages of the book, but instead to elaborate on one of its sub-texts: the intersection and interaction between international public goods provision and development assistance. The point that is made in summary fashion in the Ravi Kanbur chapter and in an expanded way in the soon to be released ODC book is that development assistance needs to be radically transformed if it is to remain relevant and to sustain support under today's rapidly changing circumstances.

In particular, it faces two major challenges:

These challenges, in turn, lead to two questions: how can the current system of aid be reformed to increase its development effectiveness? And, what should be the relationship between development assistance and the solution to transnational problems?

The problems in the current system of country-focussed aid have been well studied, and recent reviews have highlighted and quantified the ineffectiveness of aid in promoting growth and poverty reduction. Various reasons have been cited for this ineffectiveness. In addition to the well-known fact that aid has often followed political rather than developmental objectives, these reasons include the problems of lack of "ownership" of development projects and programs by countries receiving assistance and the lack of coordination among donors in the provision of aid.

It is argued in the policy essay that today's widely discussed new emphasis on development "partnerships," while a welcome advance over existing practices, falls short of providing an adequate mechanism for addressing the problems of coordination, ownership and aid dependence. Instead, the book calls for a more radical departure from the past. The solution it proposes to the deeply entrenched problems of conventional aid delivery is a shift to what is called "a common pool approach" to country aid. In its idealized form, this approach would work as follows: A recipient country would first develop its own strategy, programs and projects. Then, instead of financing individual projects or programs of their own design and choosing, donors would contribute to a "common (resource) pool" -- augmenting, thereby, the country's own budget resources. And the donors and recipient government would agree together on a system of monitoring and the resource use, for example through a procedure of annual public expenditure review.

This reform, designed to improve the effectiveness of country-focussed aid, is not an adequate mechanism, however, for dealing with the "under-supply" of international public goods which bear on development prospects and for which poor countries are in many instances an essential part of the solution. Therefore, the essay argues further that there are significant interactions between international public goods and development, and that given those interactions a strong case can be made for increased financing for the provisioning of international public goods, as a mode of development assistance. However, the book goes on to develop the point that the provision of public goods as development assistance is more complex and diversified in character than is generally appreciated.

Beyond a general definition, international public goods differ enormously, and the details have significant implications for whether and how to support their provision as a form of development aid. For example, one characteristic of international public goods is the way in which access to the potential benefits of the "good" can be controlled. In some cases it is feasible to correct the global under-supply by charging beneficiaries. This of course raises the question of poor countries? ability to pay -- which could be handled through conventional aid transfers. However, for most international public goods, this provision, in the form of what are called "club goods," is not possible. For these other international public goods, the transnational problem cannot be addressed by charging beneficiaries and therefore some other means of meeting an undersupply must be devised.

A second significant characteristic of an international public good is the way in which individual countries' efforts aggregate into the overall supply. For some, it is a matter of the "weakest link", the country making the smallest effort actually determines the overall supply of the good (Infectious disease control is an example of this.) For others, one can talk instead of "best-shot", where the country making the largest effort is the one that will determine the overall supply of the good (The example here is development of an AIDS vaccine.)

The overall point is that the character of the international public good with which one is concerned will determine the nature of the interconnection with development aid. However, both in the cases of "weakest link" problems and in others where there is an implementation dimension that must take place at the country level, shifting the focus of international assistance to the provision of international public goods does not escape the current problems of conventional aid delivery.

The ODC study therefore wrestles with some of the complex interconnections and the tensions between development aid and provision of international public goods. And, in its concluding chapter, it poses a number of issues/questions about those interconnections.

These are but a few of the questions that call for attention in an effort to increase the effectiveness of country-focussed aid and supplement that conventional approach to development cooperation by collective action for the provision of international public goods.