GLOBAL PUBLIC GOODS AND TRADE: CONFLICTS, COMPATIBILITY AND COMPLEMENTARITIES
Round Table 1 - Global Public Goods: one definition?


The fashion of Global Public Goods: a public good or a public nuisance?


Jean Coussy
CERI, France

 Two or three years ago, most papers about Global Public Goods used, in order to define GPGs, the standard micro-economic theory of public goods. They explained the existence of public goods by the fact that the consumers of some goods are, for technical reasons, nonrival and nonexcludable. They could therefore conclude that nations, like individuals, are potential free riders and that global goods are under-produced if there is not an international political authority or cooperation between nation states.
Comparison with the public goods of microeconomic analysis seemed useful analytically and as a tool to persuade orthodox theorists and liberal-minded diplomats of the term's pertinence. Once the term was accepted by all, it became easy and very frequent to include two other kinds of GPGs in discussions: the goods (or nuisances) produced by positive (or negative) externalities and the goods which should, according to the writer (or to public opinion), be delivered to all potential consumers (for instance free access to resources: water, land, health, education). The literature about GPGs became a mixture of pure economic rationality and wishful thinking.
Today this has changed. It is obvious that the GPG concept does not rely on a theoretical synthesis but is rather a rhetorical device. It is not a heuristic strategy but a strategy of influence. To demonstrate the importance of GPGs, four theories, at least, were juxtaposed: the standard theory of public goods (which assumes market efficiency except in the case of nonrivalry and nonexcludability); the theory of market failures (to introduce positive and negative externalities); the theory of basic needs (to introduce the notion of free access to resources) ; and, implicitly, some elements of political economy and social history (in the definitions of groups, of collective preferences, of collective goods and of basic needs).
This juxtaposition of different theories and different political or normative views has resulted in great disorder in GPG analysis. The standard theory of public goods and the theory of externalities may sometimes be compatible but they are different (the problem of externalities can be regulated by an agreement between private agents; this is not the case of public goods). And there is no coherence whatsoever between an economic explanation of GPGs, which allows for the technical impossibility of excluding a consumer, and a normative definition of GPGs, which seeks to include those people excluded by the market.
Moreover we know now that this juxtaposition creates not only inconsistencies in the theory but also perverse effects on the strategy of influence. Instead of persuading, as could be expected, orthodox thinkers as to the usefulness of the notion, an important book like "Global Public Goods" edited by the UNDP encourages orthodox thinkers (and unorthodox ones as well) to be wary of the notion . There are more and more papers (some of which are published in this book) that demonstrate that the GPG concept cannot be used for problems which were included in the first lists of GPGs. These refusals of the GPG notion even create a risk of inequity and of slowing down the research on some possible forms of international cooperation.
It may be possible to take another view on these problems of cooperation, by acknowledging the fact that it is less important to have a GPG theory than it is to answer the questions concerning cooperation and conflict that the GPG literature on has been trying to deal with.


What indeed is the true reason for the concept's current success? It is not a new supply of theories: public goods, externalities and social objectives (free access to resources or satisfaction of basic needs) are not new ideas. What is new is the increased demand for concepts which can be used to cope with new international problems.
Among these problems, three stand out as most important: increasing international interdependence, which creates new opportunities for cooperation, but also new causes of mutual annoyance; discontentment over the market economy and the neo-liberalism practised by dominant international organisations during the last few decades; and finally the need to find a new paradigm to struggle against aid fatigue in North-South relations.
The GPG term does help to deal with these three problems, but it is by supplying several very different instruments.
International interdependence can be studied by using the parallelism between the "realist" model of international political science (assuming the egoistic rationality of states) and neoclassical microeconomics (assuming the egoist rationality of producers and consumers). This analogy enables theoreticians to use the theorem of the free rider and demonstrate the need for public intervention in order to avoid under-production of goods. This reasoning is analytically correct. But, politically, it is premature: can one expect that the adoption of the theory of domestic public goods would be followed by its logical consequences: a world taxation regime and the legitimate use of violence by a supranational power?
Discontentment concerning neo-liberalism could be explained by market failures, in particular by the presence of externalities. But if it were possible, in this case, to talk of public goods, it would be true only when using Pigou's analysis and not Coase's theorem. Compensations for externalities cannot be public but only private. The logic of political power and violence does not apply (even if there are in this market, as in all markets, unequal bargaining powers).
Aid fatigue could be reduced and the capacity to absorb aid increased by paying new attention to the very different facts underlined by the GPG debate. First, by emphasizing the possible difficulties of an impoverished South (in this case the emphasis is on all the interdependences and not only on the externalities). Second, by showing that the opportunities of financing indivisible Regional Public Goods have been neglected (here the emphasis is on the standard theory of public goods and its analysis of indivisibilities). Third, by showing that publics investments have been neglected because of the neo-liberal bias of the aid givers during structural adjustments (here the emphasis is on the institutional opposition between public and private sectors). And finally, by showing the considerable needs (water, health, education, etc.) for which it is possible to allocate aid. Here the GPG term is used not according to the standard theory of public goods but according to the wishes of those asking for free access to resources.


The use of the one term, GPG, to deal with very different demands has contributed to its recent success. It is clear that the writers, even using the same word, make references to different parts of different theories and legitimise different actions. This betrays and aggravates the incoherencies of the literature on public goods
It is possible to choose not to see the incoherencies and to use a fashionable word which gives everyone the liberty of using new ideas and new policies introduced by the disordered debate on public goods.
It would also be possible, on the contrary, to be more precise and to avoid succumbing to fashions and confusions. In this case, people would use not the term of GPG, definitely too polysemic, but rather fragments of the analyses in order to identify new interdependences, new externalities and new desires in international political economy.