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Underprovision of global public goods (GPGs) such as climate change, mitigation, financial stability, global health or cyber security, today threatens development in the North and in the South and, thereby, also global—economic, social and environmental—sustainability. This chapter shows that myriad corrective actions by state and nonstate actors are underway. However, the sum of those actions often does not add up to what is required to resolve global challenges. Provision gaps arise, persist and exacerbate, even in policy fields in which existential risks exist. While many factors come into play, including psychological, behavioral, organizational and macro-economic and geopolitical ones, an important one, which, moreover, could be corrected directly, is the current lack of a systematic theory and practice of global public policy. The chapter suggests an agenda for future research and debate aimed at constructing the building blocks of a new branch of public policy that offers well-founded advice on how to combine individual state and nonstate actor interests, including national sovereignty concerns, while meeting the adequate provision requirements of global public goods. New thinking along the lines could offer analytical lenses through which to look at current policymaking realities, better understand the impediments and facilitators of GPG provision and, perhaps, spark willingness among policymakers to choose new policy paths—realizing that those actually lead to enhanced interdependence management, development and global sustainability. By implication, a major responsibility for fostering governance for global sustainability rests with social-science scholars.
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For the 2030 Agenda, see http://www.un.org/ga/search/view_doc.asp?symbol=A/RES/70/1&Lang=E/
For the history of the notion of public goods, see Desai ( 2003) and Pickhardt ( 2006). For the contributions that, in a decisive way, formed the conventional theories of public goods, see, among others, Buchanan ( 1965), Musgrave ( 1959), and Samuelson ( 1954, 1955). While some of the textbooks on public economics and finance by now mention the concept of GPGs, they usually do not discuss the implications of the existence of these types of goods for the conventional public goods theory. See, for example, Cullis and Jones ( 2009) and Stiglitz and Rosengard ( 2015). However, a wealth of valuable insights on GPGs and their provision is available in scholarly publications across a wide range of disciplines, notably in studies on environmental and natural resource economics, global health, knowledge and intellectual property, as well as international security, especially terrorism. See, for example: Atkinson ( 2006), Barrett ( 2007), Costanza et al. ( 2015), Kaul ( 2016), Kaul et al. ( 1999, 2003), Kaul and Conceição ( 2006), Nordhaus ( 2006), Sandler ( 2004), Sandmo ( 2000, 2007), Stern ( 2007, 2015), and Stiglitz ( 2014). A comprehensive overview of the social science literature published between the early 1970s and 2015/2016, explicitly employing the analytical lens of public goods for the examination of the phenomena referred to here as GPGs (though perhaps employing terms such as international or transnational public goods or global commons), is presented in the work of Kaul et al. ( 2016).
The term “provision” refers to both the political (negotiation or decision-making) side and the operational (implementation or production) side of the generation or maintenance of GPGs. In many instances, both sides are closely intertwined. However, in the following, when a statement refers primarily to only one side of the provision process, the term “political decision-making” or “production” will be used.
Based on Hirshleifer ( 1983), three main types of so-called production technologies are being distinguished: (1) summation technology, which is given, when each input adds to the overall availability of the good (e.g., climate change mitigation); (2) weakest-link technology, in the case of which the smallest contribution determines the good’s overall availability (e.g., dyke construction or terrorism control by way of passenger screening at airports); and (3) best-shot-technology, where one single contribution (e.g., the discovery of a new vaccine by one inventor) determines the good’s availability. See, for a more detailed discussion on this topic, for example, Cornes and Sandler ( 1996). However, important is to add that, frequently, GPG provision depends on the availability of inputs that each follow one or the other production technology and, not uncommonly, even, in themselves, a combination of these technologies, as discussed in Kaul and Conceição ( 2006).
Some public goods, including GPGs, such as the global knowledge stock, lend themselves to gradual and continuous improvement. By contrast, other public goods generate expected benefits (or stop generating costs) only if their requirements for systematic integrity or other standards of adequate provision are met. Thus, effective international cooperation is particularly critical in the case of these latter public goods. For example, climate change mitigation depends on achieving defined reductions in global CO 2 emissions by defined target dates. For a discussion on different types of adequacy standards, see, among others, Barrett ( 2007), Conceição ( 2003), Costanza and Mageau ( 1999), and Rockström et al. ( 2009).
The assumption of individual actor being tempted to free ride in the presence of public goods dates back to a thought experiment in David Hume’s Treatise of Human Nature ( 2015) what would happen to the provision of public goods if all actors were rational and pure selfish individuals. By implication it follows that they would most likely wait and see whether others provide the good, hoping that they themselves might be able to enjoy the good for free once it is available. But if many or all act in this way, the good (assuming it is not a best-shot good) is likely to be underprovided or not available at all. Hence the assumed rational actors would in due course realize that they are “rational fools” (Sen 1977:317). However, over time, this assumption has been treated as if it were a well-established fact, despite mounting evidence showing that many individual –state and nonstate –actors have, as Sen ( 2007) says, plural affiliations, identities and, hence, mixed motivations –in the presence of private goods and public goods. Some may even be “pure cooperators.” See, on the evolution of the thinking about the behavior of states in international cooperation, also Kaul et al. ( 2016), notably Section II.
In fact, offering effective and efficient incentives to states is of special importance, because, if they hesitate to cooperate and contribute, they might underprovide the incentives that nonstate actors require to overcome their respective private-business or other personal interest hurdles and dual—state and nonstate—actor failure might occur. The terms “private-business” and “personal interest” hurdles do not imply that nonstate actors pursue only selfish economic interests as the rational-choice actors in the conventional public goods theory are assumed to do. Yet, they may be mixed-motive or pure other-regarding actors. However, even then, their top-priority concerns may, if at all, only partially overlap with the provision requirements of the GPGs that need to be addressed. On the behavioral assumptions underlying individual actor’s willingness to cooperate see, again, the literature review in Kaul et al. ( 2016) referred to in footnote 2.
Externalities or spillover effects arise when an individual actor or a group of actors undertakes an action that affects third parties, perhaps even society as a whole for which the latter do not pay or are not being paid for. As Fig. 24.1 shows, externalities may be among the effects that affect the availability of public goods, including GPGs, for better or worse.
The Google search engine listed in response to the entry “global reports on global challenges” 6.5 million entries in 0.47 seconds and 5.3 million entries in 0.42 seconds in response to “reports on transnational challenges” on 12/05/2018.
The report of the Intergovernmental Panel on Climate Change (IPCC 2014), for example, presents detailed analyses of a wide range of issues relating to specific facets of climate change mitigation and adaptation. However, while interlinkages are mentioned, each aspect is discussed separately. Yet, it seems that the “need” for a more integrated approach is being realized, judging from the fact that terms such as “orchestration” and “regime complex” are emerging and being applied in a number of GPG-related policy fields. See, for example, the following contributions: Dubash and Florini ( 2011)—on energy governance; Hale and Roger ( 2014) and Keohane and Victor ( 2010)—on climate change; Nye ( 2014)—on cybersecurity; and Ocampo ( 2017)—on the provision of global liquidity and macroeconomic policy coordination. In the same vein, Frenk and Moon ( 2013) and Kickbusch and Szabo ( 2014) refer to global health as a new policy space to be in an integrated way, across borders.
See, for an overview of the new fields of diplomacy that have emerged with advancing globalization, Cooper et al. ( 2013).
The list of the special representatives of the UN secretary-general can be retrieved from: https://www.un.org/sg/en/content/other-high-level-appointments/
For access to the text of the Agenda, see again footnote 1.
The text of the Paris Agreement can be retrieved from https://unfccc.int/
Mention can in this context, for example, be made of the US withdrawal from the Paris Agreement: https://unfccc.int/news/official-communication-from-the-us-on-its-intention-to-withdraw-from-the-paris-agreement; and Germany’s “jobs first, then climate” policy that led to its delayed exist from coal and the postponement of achieving its declared climate goals: https://www.dw.com/en/germanys-coal-exit-jobs-first-then-the-climate/a-44046848/
See, on the now widely advocated reliance on private finance, for example, Bhattacharya et al. ( 2016), MDBs ( 2017), OECD ( 2018), and WBG ( 2017a, b). For studies arguing for a financing approach based on a more systematic consideration of the role specificity and complementarity between public and private finance for development and the provision of GPGs, see, among others, Development Initiatives ( 2016), Griffith-Jones and Ocampo ( 2018), Kaul ( 2017), Müller ( 2016), and Oxfam ( 2018).
In this context, it is also important to note that, in part, the financing for private-sector incentives comes out of the resources available for official development assistance (ODA). In addition, ODA is increasingly being used to cover a part of the costs that developed—“donor”—countries incur for hosting, in their country, refugees or undertaking civilian reconstruction efforts in developing countries, such as Afghanistan, in which they are involved in military activities (see OECD 2016). In addition, an increasing volume of MDB lending is being allocated to enhanced risk management and strengthening the resilience of local communities to cope with external shocks and other ill-effects resulting from GPG underprovision (see Kaul 2017). These are important initiatives. But, they do not resolve the underlying problem or, if so, then only marginally. Moreover, it would be important to assess whether and to what extent they might undercut or distort national development efforts in poorer developing countries on which effective GPG provision depends, for example, in the fields of communicable disease control or fighting international terrorism.
See, on this, also the WBG’s Guidance Note on Shadow Price of Carbon in Economic Analysis, dated November 12, 2017, which is based on the report of the High-Level Commission on Carbon Prices ( 2017). Available at http://documents.worldbank.org/curated/en/621721519940107694/pdf/2017-Shadow-Price-of-Carbon-Guidance-Note.pdf/
See, on this topic, the MDBs’ joint 2018 report on their climate finance in 2017, which shows (ibid.:5) that 80 percent of their climate finance supports mitigation and only 20 percent adaption, despite the Paris Agreement’s call (in Article 9, para. 4) for aiming to achieve a better balance between mitigation and adaptation. https://reliefweb.int/sites/reliefweb.int/files/resources/2017-joint-report-on-mdbs-climate-finance.pdf
Numerous studies on the feasibility and desirability of various types of global taxes and other innovative sources and instruments to mobilize additional public finance have been undertaken. See, for example: Atkinson ( 2005), Kaul and Conceição ( 2006), Leading Group ( 2010), and UNDESA ( 2012). So far, however, governments have shown limited interest in pursuing these options. For example, as of April 2018, only 26 countries have a national carbon tax (WBG and ECOFYS 2018:8). In fact, like in other policy fields, policy approaches to carbon pricing have also shifted away from promoting global, cooperative arrangements to relying on initiatives taken by individual national and sub-national jurisdiction or firms and, importantly, by appealing to actors’ self-interests. Promoting political support for policy initiatives is important. However, will promises of appropriable individual benefits allow provision gap closure or further reinforce individualistic—rather than mixed-motive or other-regarding—political attitudes and behavior? Also, will reliance on voluntary incremental progress happen fast enough to avoid crossing global tipping points? And what are the implications of leaving matters to individual voluntary change initiatives for compliance with the CBDRRC principle? These and other questions about GPG provision gap closure and global sustainability find only passing, if any mention in some of the newer studies on carbon pricing, which tend to hope for multiple isolated incremental change initiatives to set in motion an upward spiral of ambition and progress over time. See, among others: Cramton et al. ( 2017), Edenhofer et al. ( 2015), High-Level Commission on Carbon Prices ( 2017), and Klenert et al. ( 2018). Also, despite still rising greenhouse gas emissions (see IEA 2018), limited progress on mobilizing new and additional revenue from measures such as carbon taxes, and actual or perceived fiscal constraints, states, including the G20 member states also still go slow on reducing or eliminating altogether fossil fuel subsidies. See Coady et al. ( 2017).
The cascade approach is to ensure that only, if all other efforts fail, public and concessional finance will be used. See, for a graphic presentation of the approach, WBG ( 2017a:6).
In her comment on this decision, Nancy Birdsall ( 2018:2) states that this is not big money but a breakthrough, as this decision “opens the door to continued and increasing annual transfers for a set of GPGs critical to the development and poverty mission of the Bank (and other MDBs).” But again, the question of how these US$100 million a year (which moreover represent money coming from middle-income countries) compare to the value of the global co-benefits emanating from GPG-related activities in developing countries, benefitting both, North and South, arises. This perspective on GPGs as “being good for developing countries” is, as noted, correct but only capturing half the story, because these goods are in many cases also good for developed countries. See, for this perspective (i.e., GPGs being good for the development of developing countries), also CGD ( 2016).
The G7 includes Canada, France, Germany, Italy, Japan, United Kingdom, United States and the European Union.
For detailed information about the composition and functioning of the G20, as well as a listing of its policy statements and reports, see the G20 Information Centre’s website at: http://www.g20.utoronto.ca/about.html/
About the BRICS and their 2018 summit in South Africa, see http://www.brics2018.org.za/
For the WEF’s initiatives, agenda and reports, see https://www.weforum.org/
See https://wsf2018.org/en/ for more details about the history and activities of the Forum
See, for information about the preparations for the 2018 G20 Summit, https://www.g20.org/en
See https://un.org/ (to be amended; UN website is under maintenance).
Pathway analysis is an approach already being used by scholars in the field of earth system governance “seeking to advance understanding of the governance processes by which to steer human behavior in a way that maintains safe and stable conditions for human well-being on planet earth” (Biermann 2014:25). For an overview of the literature in this field, see besides Biermann (ibid.) also Patterson et al. ( 2017).
To address these legitimacy issues that Bodansky ( 2012) raises would require clearly defined norms and targets, as well as indicators and measurements. Interestingly, the use of such tools has rapidly proliferated in recent years, as seen from the extensive reporting and monitoring requirements set forth in the 2030 Agenda (paragraphs 72–91 of UN resolution A/RES/70/1 mentioned in footnote 1) and in the Paris Agreement (Articles 13–14 of the document mentioned in footnote 15).
Before leaving this discussion about sovereignty, it is important to mention that the concepts proposed here differ from the notion of “sovereignty as responsibility” and the so-called R2 principle. According to this principle, states have the responsibility to protect their populations against atrocities such as genocide, ethnic cleansing or other severe human-rights violations; and if a state fails to provide such protection, the international community has a responsibility to help prevent or halt such violations. The R2P notion originated from the 2001 report of the International Commission on Intervention and State Sovereignty (ICISS 2001) and was endorsed by the UN General Assembly in its resolution A/60/L.1 of September 15, 2005. For more details, see also Thakur and Maley ( 2015) and http://www.globalr2p.org/about_r2p/
This 20-member commission of independent experts chaired by Joseph E. Stiglitz was appointed by the president of the United Nations General Assembly in 2008 to assist member states in their deliberations on the world financial and economic crisis. Its 2009 report is available at: http://www.un.org/ga/econcrisissummit/docs/FinalReport_CoE.pdf/
For a comprehensive overview of social science contributions to GPG-related topics, see Kaul et al. ( 2016)
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- Global Public Goods and Governance for Addressing Sustainability
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