Hassan Damluji & Jonathan Glennie
Global Public Goods (GPGs) are those most magical of assets – benefits to the entire world that come in the form of new knowledge (like HIV treatments) or coordinated action (like fixing the ozone layer). Everyone likes them. But not enough people – and governments – have been prepared to reach into their pockets to pay for them.
After years of building the GPG concept, led by some great names in international cooperation theory (including Inge Kaul, who sadly died earlier this year, and Joe Stiglitz), could 2023 be the year the world finally gets its act together? The COVID-19 pandemic has transformed our understanding of the urgent need to deliver GPGs rapidly and at scale, while the worsening climate crisis is now the main driver of conferences and panels to discuss their importance. Many experts and activists hope progress will be made at a summit to be hosted by Emmanuel Macron in June, or in the various processes to update and reform the World Bank’s mandate and other development banks.
In all of these discussions there is one consistent talking point: just what actually counts as a Global Public Good? It sometimes feels like as much energy is spent on this technical debate about definitions and categorization as is spent working out how to pay for them.
Most economists tend to stick to the traditional definition that GPGs are, like public goods more generally, available to all (“nonexcludable”) and can be enjoyed repeatedly by anyone without diminishing benefits to others (“nonrival”). But even under this tight definition there is plenty of disagreement about what counts as a GPG and what doesn’t – there are so many shifting factors at play, and so much room for different perspectives.
Meanwhile, there are various attempts either to expand the definition of GPGs to include more broadly things that we all care about but may not fit the tight definition, or to ditch the term in preference of another one, such as the Global Commons, Global Social Goods, among other terminologies.
One thing all camps seem to agree on is the binary nature of the categorization – either something counts as a GPG (or other terminology) or it doesn’t. At the international level, things that matter globally but don’t count as GPGs – things like girl’s education, decent housing for all, food security programmes - are bucketed under “development cooperation”. The main rationale behind this binary division is that money for GPGs needs to be additional to the main source of public money for development cooperation, namely “foreign aid” A.K.A. Official Development Assistance (ODA). Put simply, GPGs benefit everyone, including the paying country, whereas foreign aid is meant to be about richer countries helping poorer ones without expecting much in return, other than the satisfaction of making the world a better place.
However, the attempt to divide international spending in this binary way is frustrating and could ultimately be a red herring. It is very hard to draw a line between goods from which we all benefit and “development” goals designed to help only a certain part of the world.
It is hard to find any GPG that does not benefit some more than others. Even reducing carbon emissions will make some countries poorer, whilst others will especially benefit. Furthermore, money spent on things that benefit the globe still has to be spent in a particular locality. For instance, much of the money spent on the Global Public Good of “saving the Amazon Rainforest” will be spent in communities living in and around the Amazon, and could be used to create jobs, build infrastructure and deliver better health and education – the development spillovers of GPG spending. Conversely, of course, spending for international objectives has often been detrimental to local peoples.
Equally, it is hard to find any local development goal that does not produce global goods. Helping the poorest and most vulnerable people to live better lives is concretely good for the world, beyond the inherent value of more justice and wellbeing. Misery and poverty spread anger and instability in a way that can cross borders - Yemen and Somalia are today cases in point. And poor people cannot buy other countries’ exports - just ask German car makers how they feel about China reducing domestic poverty. Poor communities do not have the tools to protect their own archaeological, natural and mineral resources - witness what has happened over the last 30 years in Iraq.
There is a hard-nosed self-interested rationale for every piece of spending on development cooperation, just as there is a charitable or reparative or solidaristic rationale for every investment currently categorized as a GPG – it’s just the balance is different in different cases. So, instead of this fruitless binary categorization about what does and doesn’t count as a GPG, we propose a sliding scale: the scale of Global Common Benefit (GCB).
At one end of this scale are those investments that produce a very high return for the world at large, including the contributing country. And at the other are investments (you might say expenditures) whose benefits mostly accrue to a targeted population. The scale is illustrated below using the examples of climate finance and global health:
We don’t have the binary public-good-or-not-public-good debate about public expenditure at the national level. We just debate what things a decent society has to pay for. This is despite the fact that some expenditure benefits the whole of society directly (policing, free healthcare, good roads) while other things are of more targeted benefit (income support for poor families, geographically-specific spending). We accept the whole gamut of national spending priorities because within our national communities we have bought into the belief that we are all interdependent and that poverty anywhere is a problem for us all.
That is not yet the case globally. The great majority of governmental budgets are expected to produce national returns, with a tiny fraction set aside for helping other countries. The average foreign aid spend for high income countries is 0.4% of national income, around a hundredth of what is spent at home. So if we are serious about getting countries to add new money on top of foreign aid to fund international priorities that benefit everyone, we need to get more sophisticated about making that argument, acknowledging that most international expenditure has elements of both global common benefit and development impact.
To convince governments to open the coffers, we then need to show what share of the global common benefit will accrue to them – in other words, we need to show the national return on investment to the contributing country by funding global common benefits.
That’s the subject of our next Substack…