Global Public Goods: A Survey

Abstract

This survey investigates the increasing importance of global public goods (GPGs) in today’s interdependent world, driven by ever-growing, cross-border externalities and public good spillovers. Novel technologies, enhanced globalization, and population increases are among the main drivers of the rise of GPGs. Key GPGs include curbing climate change, instituting universal regulatory practices, eradicating infectious diseases, preserving world peace, discovering scientific breakthroughs, and limiting financial crises. The survey presents a compact theoretical foundation for GPGs, grounded in the provision of public goods. Because countries may be contributors or noncontributors to a particular GPG, coalition formation and behavior play a role, as do strategic interactions between a contributor coalition and other countries. In the survey, recurrent themes include strategic considerations, alternative institutional arrangements, GPGs’ defining properties, new actors’ roles, and collective action concerns. The four properties of GPGs—benefit non-rivalry, benefit non-excludability, aggregator technology, and spillover range—influence the GPGs’ supply prognoses and the need for and form of provision intervention, which may affect the requisite institutional changes. Three representative case studies illustrate how theoretical insights inform policy and empirical tests. Regional public goods are shown to involve a question of subsidiarity and different actors compared to GPGs. (JEL C71, C72, D62, D70, H41, Q54)

Geo-Economic Fragmentation and the Future of Multilateralism

“…Mitigating climate change and preventing global pandemics are examples of necessary global public goods that cannot be supplied without widespread cross-border coordination. Other challenges, such as implementing universal regulatory practices, sharing scientific discoveries, and preventing humanitarian and financial crises also require countries to work together (Buchholz and Sandler 2021). Despite some idiosyncratic measures and selective trade restrictions being put in place, the swift and coordinated response to the Covid-19 pandemic on the whole provided a successful example of economic integration.…”

Do anticipated consequences of climate change affect risk preferences and cooperation? – An experimental study with farmers, students, and representatives of the general population of Germany

“…Cooperation is essential to mitigate climate change. From an economic perspective, curbing climate change can be seen as a (global) public good-non-excludability and non-rivalry of the benefits results in a free rider problem (Buchholz and Sandler 2021). However, it is an open question how the anticipation of future consequences of climate change will affect the willingness to cooperate (i.e.…”

Altruistic Foreign Aid and Climate Change Mitigation

“…First, it contributes to the literature on the provision of global public goods in general, and climate change mitigation in particular. As highlighted in the literature review of Buchholz and Sandler (2021), a key specificity in the problem of global public good provision is that the agents involved are sovereign countries (i.e., there is no global governance). Thus, the provision of global public goods relies on voluntary provision (e.g., Bergstrom 1986;Cornes and Sandler 1984;Cornes and Sandler 1985) or on the organization of formal coalitions through international treaties, for instance (e.g., Barrett 1994;Carraro and Siniscalco 1993;Hoel 1992).…”