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Financing and Providing Global Public Goods

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Financing and Providing Global Public Goods Financing and Providing Global Public Goods This study was commissioned by the Development Financing 2000 project within the Swedish Ministry for Financing and Foreign Affairs. The purpose of the project is to increase awareness, knowledge and international commitment to a strong, effective and well-funded multilateral system for Providing Global development. The study aims at bridging the academic discussion on Public Goods global public goods with ongoing international policy processes. A conceptual framework for assessing financing and institutional arrangements for the provision of global Expectations and Prospects public goods is suggested. Some of the key issues brought forward are: • A global public goods delivery system • A decision tree for evaluating financing options for global public goods • A possible division of labour for the international community • Case studies on climate change, biodiversity, financial stability, peace and security, and HIV/AIDS ryckeri Omslag: Rolf Hernegran, Graphium Norstedts T DEVELOPMENT FINANCING 2000 Ministry for Foreign Affairs Sweden S-103 39 Stockholm Tel: +46-8-405 10 00, Fax: +46-8-723 11 76 Study 2001:2 Web site: www.utrikes.regeringen.se Ministry for Foreign Affairs ISBN 91-7496-269-8 Sweden inancing and Providing Global Public Goods Expectations and Prospects Prepared for the Ministry for oreign Affairs Sweden rancisco Sagasti and Keith Bezanson on behalf of: November 2001 For further information about the project Development Financing 2000 please go to www.utrikes.regeringen.se/inenglish/policy/devcoop/financing.htm or contact: Andreas Ershammar Project Director Development Financing 2000 Department for International Development Cooperation Ministry for Foreign Affairs S-103 39 Stockholm Sweden Fax +46-8-723 11 76 Phone: +46-8-405 10 00 Email: [email protected] The study can be ordered from: Fritzes Kundservice S-106 47 Stockholm Sweden Fax: +46-8-690 91 91 Phone: +46-8-690 91 90 Email: [email protected] www.fritzes.se ISBN: 91-7496-269-8 Printed by: Norstedts tryckeri AB, Stockholm 2001 oreword A couple of years back the Swedish Ministry for Foreign Affairs initiated the project Development Financing 2000 with a view to increase awareness, knowledge and international commitment to a strong, effective and well-funded multilateral system for development. Previous studies within the project have focused on the roles and financing needs of the Multilateral Development Banks and the UN development agencies as parts of the multilateral system. Globalisation in its many aspects has led to opportunities and challenges that require unprecedented efforts in international cooperation. Viewing global concerns - such as HIV/AIDS, peace and security, climate change, biodiversity and financial stability - through the lens of global public goods may offer new insights on how to bring all the relevant actors and financial sources together in a more efficient and coherent international system. With this independent study we want to bring more clarity into the policy and financing aspects of the much debated concept of global public goods and point to implications and choices for the institutional framework. Gun-Britt Andersson State Secretary for Development Cooperation, Migration and Asylum Policy 3 4 Preface This report is the product of an intense period of work of several weeks by a team under the direction of Keith Bezanson, Director of the Institute of Development Studies (IDS) at Sussex University. Francisco Sagasti, IDS Senior Associate, was the principal researcher and author of the report. Peter Newell, IDS fellow, and Silvia Charpentier, Geoffrey Oldham and Sandy Thomas, IDS senior associates, were in charge of the case studies. Rachel Sabates-Wheeler, IDS fellow, contributed to the main report, and Ursula Casabonne, Fernando Prada and Jill Clements provided research assistance and helped with the preparation of the analytical reviews. The authors are grateful to Andreas Ershammar and Pernilla Johansson of the Swedish Ministry for Foreign Affairs for their constant support and many valuable suggestions. Uma Lele, Mats Karlsson, Natasha Landell-Mills, Gonzalo Castro, Julian Fleet, Lennarth Hjelmåker and Pierre Schori provided most useful comments on the draft report at two events in Stockholm and New York. 5 6 Contents Foreword Preface List of Boxes List of Figures List of Tables Executive summary i 1 Introduction 1 2 The growing importance of international and global public goods 5 2.1 The concept of public goods 5 2.2 Public goods in the age of globalisation 7 2.3 Development assistance, international public goods and the question of additionality 11 2.3.1 The question of ‘additionality’ 17 3 A conceptual framework for examining the provision and financing of international and global public goods 21 3.1 Key features of international and global public goods 21 3.2 The structure of an idealised ‘international public goods delivery system’ 27 3.2.1 Knowledge, public awareness and political decision 28 3.2.2 Global public goods regimes 28 3.2.3 International organisations and partnerships 32 3.2.4 Financing mechanisms 33 3.2.5 Operational policies and procedures 34 3.2.6 Agreements and contracts 34 3.2.7 National and local entities involved in the provision of a global public good 34 3.3 Financing options for the provision of global public goods 36 3.4 A description of mechanisms to finance international and global public goods 40 3.4.1 Payments by users and beneficiaries associated with internalising externalities 40 3.4.2 Private resources for financing global public goods 43 3.4.3 Public resources for financing international and global public goods 48 3.4.4 Partnerships for financing international and global public goods 57 4 Some implications of the conceptual framework 59 4.1 An approach to the evaluation of financing mechanisms 59 4.2 Some institutional and financing implications of the proposed conceptual framework 62 5 Case studies 67 5.1 A note on the case studies 67 7 5.2 Financing biodiversity conservation as a global public good 67 5.2.1 Background 67 5.2.2 Biodiversity as a global public good 68 5.2.3 The structure of an idealised global public good delivery system for biodiversity conservation 71 5.2.4 Financing biodiversity conservation 76 5.2.5 Final remarks 77 5.3 Climate change mitigation as a global public good 79 5.3.1 Introduction and background: the politics of climate change 79 5.3.2 Climate change and public goods 83 5.3.3 The international public goods delivery system of climate change mitigation 84 5.3.4 Financing mechanisms 90 5.3.5 Final remarks 94 5.4 Funding AIDS research 96 5.4.1 Introduction 96 5.4.2 Knowledge as a global public good: the case of AIDS research 97 5.4.3 The structure of an idealised global public goods delivery system of AIDS research 101 5.4.4 Financing mechanisms 107 5.4.5 Public resources 107 5.4.6 Private resources 108 5.4.7 Final remarks 111 5.5 Peace and security as a global public good: focus on operational conflict prevention 112 5.5.1 Introduction 112 5.5.2 Peace and security as a global public good: delimiting the terrain 113 5.5.3 The international public goods delivery system of operational deadly conflict prevention 116 5.5.4 Financing mechanisms for operational prevention 120 5.5.5 Final remarks 124 5.6 Financial stability as a global public good: Towards a new global financial architecture 124 5.6.1 Introduction 124 5.6.2 Financial stability as a global public good 125 5.6.3 Financial stability delivery system 127 5.6.4 Financing mechanisms for the provision of the global public good 130 5.6.5 Towards a new financial architecture to improve the provision of financial stability 134 5.7 Some common features of the case studies and analytical reviews 135 6 Concluding remarks and suggestions 137 Bibliography 143 Annexes 159 8 List of Boxes Box 1.1 Some concerns regarding the value of the concept of global public goods 2 Box 3.1 Two definitions of global public goods 22 Box 3.2 International regimes and global public goods 30 Box 3.3 Global public goods and the high-level panel on financing for development 37 Box 3.4 Examples of international taxes, fees and levies 44 Box 3.5 Main functional roles of the United Nation system 56 Box 5.1 The importance of species diversity 69 Box 5.2 Biodiversity enabling activities: the Global Environment Facility (GEF) guidelines 74 Box 5.3 Financing obligations under the United Nations Framework Convention on Climate Change (UNFCCC) 81 Box 5.4 The Kyoto Protocol in brief 82 Box 5.5 Stages of a financial crisis 126 9 List of igures Figure 2.1 Official and private flows to developing countries (US$ billion) 12 Figure 2.2 Official and private flows to developing countries (percentages) 13 Figure 3.1 Global public goods in a fractured global order 27 Figure 3.2 An international public goods delivery system 29 Figure 3.3 A framework for exploring financing options for the provision of global public goods 39 Figure 5.1 The value of biodiversity 68 Figure 5.2 Biodiversity conservation: An international public goods delivery system 72 Figure 5.3 Biodiversity conservation: Financing options. Decision tree 78 Figure 5.4 Climate change mitigation: an international public goods delivery system 85 Figure 5.5 Climate change mitigation: Financing options. Decision tree 91 Figure 5.6 HIV/AIDS vaccine research: An international public goods delivery system 100 Figure 5.7 HIV/AIDS vaccine research: Financing options. Decision tree 106 Figure 5.8 The evolution of violent conflicts 113 Figure 5.9 Peace and security: An international public goods delivery system 117 Figure 5.10 Peace and security: Financing options.
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