Global Incentives for International Public Goods

As the world becomes more integrated through trade, financial flows, and the movement of people, a new set of public policy challenges arises.1 National policy initiatives are necessary, but insufficient. Indeed, actions taken in the national interest can sometimes make matters worse from an international perspective. Globally coordinated efforts are needed to deal with such challenges as climate change, the AIDS epidemic, and financial crises. If these threats to global stability can induce global incentives to work collectively and cooperatively, they can be turned into opportunities. Humane and equitable globalization requires a shared vision of global prosperity. This shared vision makes possible international public goods (IPGs), which include the rules that apply across borders, the institutions that supervise and enforce these rules, and the benefits that accrue without distinctions between countries. The benefits accrue, for example, in the form of a cleaner environment, the lowered prevalence of disease, a more stable global financial system, and a reduced level of international conflict.