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Explores how policy‐makers have addressed the need for international co‐operation on resource allocation in financing global public goods. It analyses the range of policy tools currently available, and suggests ways in which resource allocation methods could be improved in the future.

Explains the purposes underlying the structure of the four main parts of the book—to review and sharpen the analytical concepts employed; to clarify the stake‐holder interests, which comprise ‘publicness’; to examine issues affecting the efficiency of production of public goods; and to identify the ways in which the interface between national and transnational decision‐making affects the strategic management of the provision of global public goods.

Examines the implications of translating the concept of public goods, originally developed in the setting of a domestic national economy, to that of global public goods set within a transnational global economy. This requires important adjustments to the concepts of ‘triangle of publicness’ (publicness of consumption, of benefits, and of decision‐making), as well as new typologies of public goods.

Explores the production process for global public goods. The main issue is what happens after international agreements have been made to enhance the provision of public goods. How is the follow‐up managed? Key factors are the extent of compatibility between the institutions and organizations involved, the extent to which national structures allow transnational decisions to filter back into national policy‐making, and the extent to which international public management structures are themselves designed to carry out follow‐up tasks.

Explains the general character of the critical link between globalization and global public goods, in order to set the context for the specific analyses in the four main parts of the book, and to highlight the need for a proper theoretical basis to guide public policy‐making. Without such a basis, globalization will be shaped by disjointed political pressures and jurisdictions, which are likely to favour the emergence of public bads and hinder the development of public goods.

Economic and cultural globalization seem to have ushered in an awkward and potentially unstable period of transition for the world. Even if one supposes that free trade and unrestricted capital mobility can eventually result in global factor price equalization and international equality, the transition may take decades if not centuries. At stake are questions of how to distribute the costs incurred, and the benefits to be derived, by cooperative action to create global public goods or minimize global public bads. Questions of equity are also implicated in the origin of the global problems themselves. International negotiations are influenced by unequal economic and bargaining strengths and the diverse stages of development at which nations find themselves.

The basic argument of this chapter is that equity and distributional criteria must be at the core of a global public goods framework for international cooperation. There are several reasons behind this. First, equity and justice promote cooperative behavior, itself needed for the provision of public goods. Second, when the system is perceived to be fair and equitable, nations will participate in it willingly. Third, global equity is itself a public good that, without cooperation or coercion (i.e., in a decentralized setting), may be undersupplied. The undersupply may be because, e.g., there is no private market through which nations or individuals may meet their need to give.

Thus, the first section of this chapter sets the stage by outlining the continuing role of inequality among nations in shaping the world. The second section considers the potential instrumental value of social cohesion in public goods supply (equity for public goods). After that, the chapter considers how distributional factors affect the demand and supply of public goods. Then, it pursues the proposition (originally from Thurow, 1971) that the distribution of income is itself a public good. The final section offers conclusions. The rest of the chapter illustrates the value of equity for the production of public goods, in the distribution of public goods, and as a public good itself.

People need both private and public goods for their well‐being. This chapter focuses on public goods, introducing the generic concept of public goods first, refining this generic definition, and identifying the distinguishing characteristics of global public goods. The main properties and distinguishing features of international public goods, including regional and global public goods can be grouped into two sets. The first is that their benefits have strong qualities of publicness – i.e., they are marked by nonrivalry in consumption and nonexcludability. These features place them in the general category of public goods. The second criterion is that their benefits are quasi universal in terms of countries (covering more than one group of countries), people (accruing to several, preferably all population groups), and generations (extending to both current and future generations, or at least meeting the needs of current generations without foreclosing development options for future generations). This property makes humanity as a whole the publicum, or beneficiary of global public goods.

This chapter proposes a methodology for identifying high-return investments and assessing when international cooperation pays. It describes potentially high-return investments in global public goods and shows how the gains would be distributed across major actor groups. It explains that the underlying logic of the analysis of global net gains from different investment opportunities in global public goods is that the international community would like to invest in goods that bring high social returns for the world.

Examines the theoretical aspects of extending Samuelson's statist model of public goods provision into a global context, and what theoretical adjustments might be necessary. The most problematic part of extension involves the desirability of global production efficiency and the separation of equity and efficiency conditions, which play an important role in Samuelson's formulation.

Focuses on assessing the provision status of global public goods, proposing as assessment methodology, which an appendix applies to seven global public goods, presenting a provision profile for each. The methodology and the profiles are first steps toward establishing a consolidated, quantitative picture of how global public goods are provided

Develops two typologies of global public goods, and explains how issues of publicness relate to issues of production level and efficiency. It begins by examining the main classes of public goods from the viewpoint of how the nature of their benefits could affect the prognosis for their provision. It shows that judging provision efficiency becomes more complex when technologies of supply aggregation are taken into account. It then discusses two additional, special classes of public goods—club goods and joint products. On the basis of this analysis, the chapter suggests a few measures that could be employed in judging optimal provision, a discussion that leads to the two typologies, and is useful for supply prognoses. Finally, it searches for the Holy Grail: an empirical measure of optimality.

The provision of global public goods will impose two tasks (1) increase the role of non‐state actors (2) do this without permitting the operation of special‐interest politics to jeopardize their legitimacy. While non‐state actors are crucial to rebuilding the legitimacy of the international system, they are only likely to be accepted and effective in this role if they succeed in strengthening their own legitimacy in the eyes of governments, inter‐governmental organizations, and the general public.

Today we recognize that knowledge is not only a public good but also a global public good. We have also come to recognize that knowledge is central to successful development. The international community has a collective responsibility for the creation and dissemination of one global public good – knowledge for development. But how can we deal with the dilemma of reconciling the often contradictory incentives for the production and for the dissemination of knowledge? States must decide to what extent there should be public provision and to what extent private production should be encouraged through strengthened intellectual property rights. Designing the appropriate intellectual property rights regime entails balancing static and dynamic efficiency. Indeed, because research (knowledge) is one of the most important inputs into the production of further knowledge, raising the “price” of knowledge may actually reduce follow‐on research and slow the pace of innovation. Thus, it is essential to reward research and innovation by firms while ensuring widespread access to knowledge and protection against monopoly rents. Issues of equity and efficiency interplay here, as most innovations incorporate ideas that are part of the common pool of knowledge. Narrowing the knowledge gap between developing and developed countries requires the construction of strong domestic knowledge infrastructures, most notably in education. Because knowledge is a global public good, Stiglitz argues that successfully meeting the challenges posed by knowledge externalities depends critically on cooperative efforts at the international level.

The current institutions of the world economy already have embedded a concern for distributive justice. Kapstein's historical perspective provides an argument in defense of this statement. This chapter argues that a just economic order has long been valued as a global public good, especially after the Second World War, when the Bretton Woods system was designed. For leaders reflecting on the causes of the war, the links between economic distress and global conflict were all too evident. Kapstein shows that the postwar architecture relied on two pillars: creating wealth and distributing it. Wealth was to be created primarily through free international trade, while redistributing it was the responsibility of domestic institutions. Yet this approach became less and less effective over time. Distributive policies have the character of an international public good, and as such, ways had to be found to ensure that these policies would not be underprovided, as they are if we rely on domestic action alone. The only way forward now, Kapstein argues, is to address these concerns at the international level.

Explains how corruption is a major hindrance to the provision of global public goods, and how international attempts to control corruption, while not always necessarily successful, constitute a global public good in themselves. Explores the difficult incentives surrounding the production of the global public good of corruption control. It also provides a case study showing how an international civil society organization, Transparency International, has helped to build coalitions between governments and private corporations to control corruption in the international arena.

A key difference between public goods and global public goods is that the latter concept lacks the coercive authority, which the nation state enjoys. This means that the provision of global public goods requires a much more highly developed mechanism of incentives. Examines firstly, the different incentive structures that can underlie the provision of global public goods—for example, international trade agreements; secondly, the way in which these structures can be manipulated to foster international co‐operation and increase the provision of such goods.

During the 1980s and 90s, aid programs increasingly became a kind of surrogate national government, with outside agencies (usually led by the Bretton Woods institutions) attempting to foster the provision of public goods at the local and national levels. In this vision, the International Monetary Fund (IMF) and the World Bank would lead reform on behalf of the national polity because the government receiving the aid was too weak, too corrupt, too prone to backsliding, or too incompetent to mobilize the needed actions on its own. Thus, during the 1980s and especially in the first half of the 90s, aid was closely tied to policy conditions to ensure that the aid was linked to appropriate policies and the appropriate provision of public goods by the national government. In principle, if the aid were not used in the way agreed with the outside agencies, it would be cut off. We know from a large number of studies and frustrating case histories that this model is deeply flawed.

A new approach to aid is needed. In our view, donors should get back to basics to ensure that aid really delivers public goods that otherwise will not be provided either by markets or recipient governments in the absence of the aid. Without a doubt, there is one hugely neglected area of public goods: goods that can only be provided effectively at the level of the region (defined here to mean a grouping of neighboring governments) or on a global scale. The first category may be called “regional public goods” and the second category “international public goods.” This chapter focuses on regional public goods, partly because international public goods are covered in other chapters and partly because very little work has been undertaken on the actual and desirable levels of public goods provision at the regional level.