Friday, November 14, 2014
Global Public Goods: What They are and Their Relevance
By Bakampa Brian Baryaguma
[Dip. Law (First Class)–LDC; PG Cert. Oil & Gas–Mak; LLB (Hons)–Mak; GC Candidate–GCA]
Today’s ‘... world of shared risks and common opportunities, grounded in the realities of mutual dependence and growing interconnection,’ has given rise to the concept of global public goods, which truly characterizes and defines it; and whose importance is as vital as global dependence and interconnectedness are.
To my mind, global public goods are interstate structural belongings available to the whole world or a significant portion of it. In economists’ jargon, they technically share two qualities – non-excludability and non-rivalry; meaning respectively, ‘... that when provided to one party, the public good is available to all, and consumption of the public good by one party does not reduce the amount available to the others to consume.’ They can be regional or global.
There are six types of priority global public goods:
(a) Strengthening the international trading system;
(b) Tackling climate change;
(c) Enhancing international financial stability;
(d) Preventing the emergence and spread of infectious disease;
(e) Achieving peace and security; and
(f) Generating knowledge.
This essay discusses the first five public goods in the main and in conclusion, tackles generating knowledge, as a cross-cutting issue.
2. The Good in Global Public Goods
The good in global public goods lies in their intrinsic value to humanity. But some players in the global arena look at these goods as just immediate, but not important, demands – mere overbearing imperatives. This is wrong. Rather, they should be acknowledged as important and immediate needs, necessary for producing long term and sustainable benefits. The latter perspective, adopted below, helps us in terms of better analysis and better solutions to global challenges.
A. Strengthening the International Trading System
Trade increases productivity through more efficient resource allocation, greater competition and technology transfer. Its progressive liberalization has been a chief engine of global economic growth for well over half a century. Estimates show that abolishing all barriers to trade in goods and services could increase global income by $2.8 trillion and lift 320 million people out of poverty.
The international trading system is a global public good, mainly by virtue of the principles of most-favoured-nation treatment and national treatment – enshrined respectively in Articles I and III of the General Agreement on Tariffs and Trade (GATT) – because formally, the system’s availability to any one GATT member is not at the expense of any other member and the end result of the system – preventing or reducing protectionism – benefits, potentially, all of its members. As noted by the United Nations (UN) Secretary-General, ‘... an open and equitable trading system can be a powerful driver of economic growth and poverty reduction.’
B. Tackling Climate Change
The UN Secretary-General warned that, ‘One of the greatest environmental and development challenges in the twenty-first century will be that of controlling and coping with climate change.’
Mitigating climate change and adapting to its impacts are global public goods, most efficiently achievable by effective use of carbon taxes to generate a double dividend: first, help reduce emissions of carbon dioxide, the most important greenhouse gas; and second, provide substantial tax revenue to national governments – money that could be used to finance more global public goods – if the rate were set at a level that would lead to an optimal reduction in carbon emissions.
C. Enhancing International Financial Stability
Financial crises can have serious impacts on poverty levels, and engender international instability.
International cooperation by governments and multilateral organizations to organize and coordinate efforts to prevent and resolve financial crises is a global public good, because the world’s common interest is that countries do not pursue policies that provoke financial instability.
D. Preventing the Emergence and Spread of Infectious Disease
Infectious diseases pose grave dangers to both social and economic stability, threatening the health of every person and the prosperity of every nation.
Prevention is better than cure. Controlling infectious diseases requires: first, improving the global preparedness-to-response chain; second, strengthening the capacity of public health systems to prevent and treat infectious diseases; and third, increasing knowledge for vaccines and treatment.
This would reduce over time the number of infectious diseases confronting global health systems and the deaths they would cause, to the benefit of all states and populations.
E. Achieving International Peace and Security
Preserving international peace and security underlies and is essential to all the other public goods. No wonder, by 2006, 22 out of the 34 countries farthest from reaching the Millennium Development Goals, were in or emerging from a conflict.
There are three major global public goods objectives in achieving international peace and security: combating international terrorism; ensuring nuclear non-proliferation and disarmament; and agreement on legitimate use of military force, which pose new security realities of common threats and shared vulnerability, necessitating a much more cooperative global approach to solve them. Progress has been made in this regard and it should be consolidated.
Global public goods are undoubtedly relevant in solving special problems, posed by global issues. They should be given serious attention by governments and peoples of all states.
Quite notably, the nature and intensity of global issues and the problems they pose, are constantly evolving. Hence, in order for us to keep trends with changes in the global environment, there is need for more investment of resources in generating knowledge, which is a cross-cutting issue. Any strategy to provide global public goods requires a special global effort to build scientific and technological capacities everywhere, including in developing countries, to help drive economic development.
That knowledge must be capable of being diffused and assimilated by all people, once generated, for it to be relevant in better analysis of global challenges and presenting better solutions to them. Only then shall we ably and fully ‘... look at the importance of these public goods and ... contribute everyday to a better governance of them [to] make this world a better place.’
Notes and References
1. International Task Force on Global Public Goods, Meeting Global Challenges: International Cooperation in the National Interest (2006), at 3. The Task Force observes that, ‘International cooperation has many uses. It is a tool for altruistic purposes, importantly so, and it serves a host of geo-political interests, certainly. But it is also a tool for states to align their long-term, enlightened national interests to achieve common goals. Some of these goals are “global public goods”.’ See, ibid., at 13.
3. Ibid. The Task Force gives traditional examples of national public goods as including ‘... traffic control systems and national security – goods that benefit all citizens and national private actors but that none could afford to supply on their own initiative.’
4. These benefit countries belonging to a specific geographic territory e.g. the East African Community (EAC).
5. These benefit all countries and therefore, all persons.
6. See, International Task Force on Global Public Goods, supra note 1, at 31. According to the Task Force, ‘These are priorities because the threats posed by global ills are rapidly mounting. Because the issues are interlocking, each adding to the other, none are able to be adequately addressed in isolation (as in the vital relationship between trade and security or infectious disease and trade). Because the benefits of supplying them are substantial. Because failing to supply them would have significant and in some cases irreversible consequences. And because they are important to a range of public and private constituencies whose engagement is necessary for progress.’ See, ibid.
7. This explains why, as Javier Solana says, in his Week 9 lecture on ‘Global Governance,’ in the Global Civics lecture series, of the Global Civics Academy, ‘Many developing countries are suspicious that the climate change drive is a move to prevent them from developing industrially,’ in spite of the fact that climate change is a scientifically proven reality. They feel unnecessarily pushed or even blackmailed by their developed counterparts.
8. For example, enhancing development. The International Task Force on Global Public Goods, supra note 1, at 15, stated that there is a relationship between global public goods and development. The Task Force gave three dimensions to this relationship: first, transcending traditional development divisions between donor states with advanced financial capacities and recipient states with limited resources; second, global public goods can propel development. For example, improvements in international financial regulation systems are critical to achieving broader economic development; and third, development is fundamental to the supply of many important global public goods, whose provision is hindered by limited state capacity to avail them. This means that if provision of global public goods propels development, then development sustains the provision of global public goods. This is a hallmark of the symbiotic relationship between them.
9. International Task Force on Global Public Goods, supra note 1, at 16.
10. Ibid., at 49. Further, the benefits of strengthening the international trading system may be seen in light of its subtle promotion of international peace and stability. The 19th century French Liberal economist, Frederic Bastiat, so forcefully made the case that free trade was perhaps the surest route to peace as well as prosperity. He is often credited with having said that ‘If goods don’t cross borders, soldiers will.’ See, Thomas J. DiLorenzo, ‘Biography of Frederic Bastiat (1801-1850).’ Available at http://mises.org/page/1447/Biography-of-Frederic-Bastiat-18011850 (Accessed on 23-10-2014, at 00:56 hrs).
11. Ibid., at 16.
12. Ibid., at 49. Also underlying the international trading system have been, ‘... the ideal of universality and the principles of reciprocity and non-discrimination that have been present since its origins,’ (see, ibid., at 50) which have contributed to its remarkable evolution and ability to empower people world over. These are global public goods in themselves.
13. Report of the Secretary-General, In Larger Freedom: Towards Development, Security and Human Rights for All (2005), at 18. Unfortunately however, the international trading system is not open or equitable enough. The Secretary-General pointed out, ibid., that, ‘At present, developing countries are often denied a level playing field to compete in global trade because rich countries use a variety of tariffs, quotas and subsidies to restrict access to their own markets and shelter their own producers.’ The International Task Force on Global Public Goods, supra note 1, at 50, also noted that, ‘... as the system has grown, over time it has accommodated rules that ... allow for discriminatory treatment of products and trading partners.’ These contradictions in the system negate its goodness and intrinsic value to the people it is meant to serve.
14. Ibid., at 19.
15. International Task Force on Global Public Goods, supra note 1, at 41.
16. Ibid., at 16.
17. Ibid., at 45.
18. Ibid. The Task Force notes that policy makers are broadly agreed on the causes of financial instability: unsustainable macroeconomic policies, fragile financial systems, institutional weaknesses and structural flaws in international financial markets. See, ibid., at 46.
19. Ibid., at 16.
20. Ibid., at 33. Thanks to enhanced and improved travel means, infectious diseases are not effectively deterred by national borders, hence the need for collective action by states, together with other international actors. Thus, the Report of the Secretary-General, supra note 13, at 20, emphasizes that, ‘Many infectious diseases that ravage developing countries today, notably HIV/AIDS and tuberculosis, pose severe risks for the entire world, particularly in the light of emerging drug resistance. Both familiar and new infectious diseases require a concerted international response.’
21. Ibid., at 34.
22. Ibid., at 37.
23. Ibid., at 55. The Task Force argues that, ‘In the absence of an effective collective security system, not only will the levels of war, terrorism and other forms of strife increase, but international prosperity will be at risk or even reversed. War, conflict and terrorism will erode international confidence, weakening financial markets. And isolationism and distrust between peoples will infect trade regimes, bringing protectionism and economic reversal. International public health and efforts to combat climate change will suffer in an atmosphere of eroding security.’ See, ibid. Conflicts cost millions of lives and impose corollary health, environmental and economic costs to neighbouring states and the global community. Preserving international peace and security is therefore, a precondition for sustainable development and poverty reduction.
24. Ibid., at 16. The Millennium Development Goals are a series of time-bound targets, cutting across development areas of interest to the United Nations – ranging from halving extreme poverty, to putting all children into primary school. They were agreed upon at the Millennium Summit in the year 2000, with a deadline of 2015.
25. Ibid., at 55.
The Report of the High-level Panel on Threats, Challenges and Change, A More Secure World: Our Shared Responsibility (2004), at 31-55, identified six clusters of interconnected security threats, which require a new security consensus and concerted national and international action. These are: war between states; internal conflict; terrorism; organized crime; the use and spread of nuclear, biological and chemical weapons; and poverty, infectious disease and severe environmental degradation.
The Report of the Secretary-General, supra note 13, at 25, also identifies the same threats, plus poverty. It stresses that, ‘In our globalized world, the threats we face are interconnected. The rich are vulnerable to the threats that attack the poor and the strong are vulnerable to the weak, as well as vice versa. A nuclear terrorist attack on the United States or Europe would have devastating effects on the whole world. But so would the appearance of a new virulent pandemic disease in a poor country with no effective health-care system.’ The Secretary-General therefore, suggested that, ‘On this interconnectedness of threats we must found a new security consensus, the first article of which must be that all are entitled to freedom from fear, and that whatever threatens one threatens all. Once we understand this, we have no choice but to tackle the whole range of threats. We must respond to HIV/AIDS as robustly as we do to terrorism and to poverty as effectively as we do to proliferation. We must strive just as hard to eliminate the threat of small arms and light weapons as we do to eliminate the threat of weapons of mass destruction. Moreover, we must address all these threats preventively, acting at a sufficiently early stage with the full range of available instruments.’ See, ibid.
27. The Report of the Secretary-General, supra note 13, commented and offered guidance on these matters. On combating international terrorism, the Secretary-General said that, ‘Our strategy against terrorism must be comprehensive and should be based on five pillars: it must aim at dissuading people from resorting to terrorism or supporting it; it must deny terrorists access to funds and materials; it must deter States from sponsoring terrorism; it must develop State capacity to defeat terrorism; and it must defend human rights.’ See, ibid., at 26. On ensuring nuclear non-proliferation and disarmament, the Secretary-General said that, ‘The Treaty on the Non-Proliferation of Nuclear Weapons ... has proved indispensable: it has not only diminished nuclear peril but has also demonstrated the value of multilateral agreements in safeguarding international peace and security. ... Progress in both disarmament and non-proliferation is essential and neither should be held hostage to the other.’ See, ibid., at 28. On legitimate use of military force, the Secretary-General said that, ‘When considering whether to authorize or endorse the use of military force, the [Security] Council should come to a common view on how to weigh the seriousness of the threat; the proper purpose of the proposed military action; whether means short of the use of force might plausibly succeed in stopping the threat; whether the military option is proportional to the threat at hand; and whether there is a reasonable chance of success. By undertaking to make the case for military action in this way, the Council would add transparency to its deliberations and make its decisions more likely to be respected, by both Governments and world public opinion.’ See, ibid., at 33.
28. Ibid., at 21.
29. International Task Force on Global Public Goods, supra note 1, at 69.
Plato said that knowledge is power. But Napoleon Hill, Think and Grow Rich (New Edition) (1960), at 56, noted that this is a false belief. To him, ‘It is nothing of the sort! Knowledge is only potential power. It becomes power only when, and if, it is organized into definite plans of action and directed to a definite end.’ (Emphasis in original.) Mr. Hill advocated for specialized knowledge that is organized and used ‘through practical plans of action.’ See, ibid. I request the international community to devise practical plans of action aimed at ensuring that all people especially, those living in the marginalized parts of the world like Sub-Saharan Africa, are enabled to participate in generating and using knowledge of global public goods and their relevance in better analyzing and solving global challenges.
30. Javier Solana, supra note 7.