Understanding global public goods: definitions and typologies The discussion here builds on the definition of global public goods

proposed by Kaul, Grunberg and Stern:¹⁰Global public goods are goods whose benefits extend to all countries, people, and generations. Goods can be potentially public as well as potentially global. That is, many goods can be made public or global (or both) through human actions or public policies (or both). Global public goods are nothing new. Many,

9 For relevant studies on global public goods see, among others, Andersen, E.A. and Lindsnaes, B.,Towards New Global Strategies,op. cit.; Ferroni, M. and A. Mody (eds.), International Public Goods: Incentives, Measurement, and Financing, Washington, D.C.: Kluwer Academic Publishers and World Bank, 2002; Kaul, I., I.

Grunberg and M. Stern (eds.),Global Public Goods: International Cooperation in the 21st Century,New York: Oxford University Press, 1999; Kaul, I.,. P. Conceição, K. Le Goulven and R. Mendoza (eds.),Providing Global Public Goods: Managing Globalization,New York: Oxford University Press, 2003; Kaul, I., Global Public Goods: A Key To Achieving The Millennium Development Goals, Office of Development Studies, UNDP, January 2005; Stiglitz, J.,The Theory of International Public Goods and the Architecture of International Organizations, Helsinki: United Nations University and World Institute for Development Economics Research, 1995.

10 Kaul, Grunberg and Stern,op. cit.

notably the global natural commons, predate human activity. They include the atmosphere, the geostationary orbit, the electromagnetic spectrum, and the high seas. And as long as human beings have existed, there have been externalities.

With the running process of globalisation the volume of externalities and intentionally created goods of global reach has been growing exponentially: new technologies increasingly enhance human mobility as well as movement of goods, services, and information around the world; economic and political openness has stimulated cross-border and transnational activity; systemic risks, including global climate change;

integrated financial markets, environmental degradation and poverty eradication require collective action on an international level, etc.

In other words, growing socio-economic inequities call into question the legitimacy of the global system. International regimes are becoming more influential, although often formulated by small groups of powerful nations yet often claiming universal applicability. Nations and groups see their public domains become interlocked and their living conditions become interdependent. The current global financial crisis well illustrates the domino effect of global risks. Lax food safety standards in one area can create health problems in many distant places through international travel or trade. And new global public platforms, such as the Internet, blunt many conventional public policy tools, including those for controlling such public “bads” as tax evasion, money laundering, drug trafficking, commercial fraud, and child abuse. The public and policymakers all over the world increasingly find that public goods they would prefer to have locally – or for “bads” not to have – cannot be produced solely through domestic action. As a consequence, a growing number of national public goods have gone global.

Figure 3 classifies global public goods primarily according to their human-made (social) properties. As already said in part 1 of this paper, various goods have moved or are moving within or across quadrants.

These changes in status show that global public goods are public because they are not private and global because they are not national.

However, the impact of globalisation trends in economics, politics, social and cultural affairs makes international collective decisions on whether and to what extent to make certain goods public or private, more than necessary. Still, agreeing on policies at the global level can be difficult, as indicated by the discussions of the World Trade Organisation’s agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) or the debate on climate changes in the Copenhagen Conference.

This mixture of national goods and global public goods implies policy action at the international and global level. The goods in

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quadrants 2 and 4 of Figure 3 require harmonisation of national policies.

Policy harmonisation is often intended to encourage countries to internalise cross-border externalities, i.e. to help generate positive ones and to reduce negative ones. Several goods in quadrant 2B involve such efforts. Efforts to increase the inclusiveness of such goods as international communication and transport systems are aimed at improving the worldwide availability of network externalities. The same intention usually drives initiatives to increase adherence to norms and standards, including respect for human rights. Most of the goods in quadrant 2B involve transnational policies that aim at providing global benefits. By contrast, many of the goods in quadrant 4 involve the internalisation of negative cross-border externalities. The promotion of basic human rights, shown in quadrant 2B, is an example.

Quadrant 4A lists goods that require policy responses that involve defining and assigning new (national) property rights, such as national pollution allowances or the exclusive economic zones created by the 1982 UN Convention on the Law of the Sea. Quadrant 4B includes goods involving measures similar to those in the national context; they are aimed at making certain crucial goods, such as basic education, health care, eradication from poverty, universally available. Moral and ethical concerns often motivate the international community to undertake such measures.

A further policy message relates to the pure public goods listed in quadrant 3. Many of the goods in this quadrant are the same as those in Figures 1 and 2. As national borders become open and cross-border economic activity increases, these goods become indivisible across borders, or transnational. In other words, all nations face the same international economic conditions, the same conditions in international financial markets and the same risk of global climate change. In the case of environmental sustainability, fundamental changes are needed in global provision and consumption patterns to avoid irreversible environmental damage, and hence require global governance action.

Figure 3.

The de facto mix of national goods and global public goods

E

2B Non-rival goods kept or made non-exclusive - International

communication and transport networks

- Norms and standards - Respect for human rights - Respect for national and other social norms and institutions - Ozone layer: targets for reducing emissions of 4B Rival goods kept or

made non-exclusive - Atmosphere - Global gene pool to promote food security

Source: Kaul and Mendoza (2003), p. 98

The considerations in Figure 3 make it possible to develop a typology of global public goods (Table 1). This typology differentiates

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between goods based on the nature of their benefits and the degree of their publicness. By examining global public goods through the triangle of publicness (i.e. public dimension of consumption, decision-making and distribution of benefits) Kaul and others¹¹ have shed new light on some of the political tensions accompanying globalisation. For example, in the case of multilateral trade regime, the distribution of benefits is not completely public, but consumption and formal decision-making are. Or in the case of the international financial architecture, distribution of benefits and decision-making are not completely public but consumption is. These cases show that understanding the nature of the publicness of global public goods requires assessing globalisation not just for cross-border private economic activity but also for what is happening to goods in the public domain.

Table 1

A typology of global public goods by the nature of their publicness

Class of good Nature of publicness Global natural commons

(e.g. the atmosphere or the high seas)

Free (managed) access: In their original state these goods are typically rival and non-excludable. Some global natural commons (e.g. the ozone layer) have taken on the social form of a managed access resource. They are usually still available for all to consume, though sometimes only in limited measure. knowledge, for example, is often accessible to all. It is non-rival and difficult to exclude. It typically has limited (if any) commercial value but can be important to people’s daily lives or to economic and political governance.

Limited access: Patented knowledge, for example, may be in the public domain but its use is restricted, at least for a period. The rationale is that

11 Kaul, I., P. Conceição, K. Le Goulven and R. Mendoza, (2003), op. cit.

providing incentives to private producers of knowledge will enhance the economy’s growth and its dynamic efficiency.

Inclusiveness being promoted:

Many efforts are under way to enhance the inclusiveness of goods with network characteristics and whose expansion promises “additional user”

benefits or positive network externalities.

Examples include international regimes (multilateral trade regime, Universal Declaration of Human Rights), global communication and transport systems, and informal norms.

Efforts to increase the inclusiveness of these goods will widen the range of users, globalising the benefits and costs. Globalisation of public goods includes both top-down (from international to national) and bottom-up efforts.

Global policy outcomes/

conditions

(e.g. global peace, financial stability and environmental sustainability)

Universalisation of essentially private goods:

Examples include (global (national and international) efforts aimed at “for all” goals: basic education, health care, and food security.

Indivisibility of benefits and costs:

Goods in this category have indivisible benefits that form the core of the interdependencies among countries and people. These goods tend to be technically non-excludable and so de facto inclusive and public.

Source: Kaul and Mendoza (2003), p.100.

An important conclusion from this expanded understanding of global public goods is the recognition of a new class of global public goods, which have been called “global policy outcomes”. Kaul argues that the emergence and growing importance of these goods requires that international cooperation moves from dealing just with between or

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the-border issues to also managing a growing number of issues of behind-the-border convergence in national public policy. This requires a strengthened role of the UN in better managing the provision of global public goods.¹²It presents a selective but very useful typology of global concerns as global public goods.¹³

Such a public goods typology has consequences for collective action.

International cooperation seems essential for global policy outcomes or conditions. For global human-made commons, the international community has more flexibility in pursuing international cooperation. In addition, international cooperation can often take the form of more concerted national policy action to supply human-made global public goods. Yet for global policy outcomes or conditions and the shaping of their indivisible benefits there is often a need for truly common action at the global level.