Financing Global and Regional Public Goods through ODA: Analysis and Evidence from the OECD Creditor Reporting System

Since the late 1990s, the UNDP Office of Development Studies has raised awareness among the development and donor communities that the enhanced provision of international public goods will be of critical importance to achieving the Millennium Development Goals (MDGs),1 notably the objectives of reducing poverty (Kaul et al. 1999). The UN conference on Financing for Development held in Monterrey, Mexico, in March 2002 has challenged the donor community to put in place the means and the structures required to mobilize the finance needed to support these goals, which, among others, stipulate the reduction of world poverty by half by the year 2015. Available evidence (Dyer and Beynon 2003) suggests that the impact of investing in international public goods can be high and is important for achieving the MDGs. For example, the cost of lifting one person out of income poverty through agricultural research and global trade expansion is estimated to be much lower than the cost of the same impact through aid to poor countries.