Pricing the Global Club: from Public Goods to Trump’s Mar-a-Lago Logic of Sovereignty

1. Introduction Traditionally, an analytically convenient and widely used assumption in the international trade and development economics literature has been that of lump-sum distribution of direct (e.g., income) or indirect (e.g., consumption, tariff) tax revenue when various policy implications of such instruments (e.g., terms of trade or welfare effects) were to be examined. This analytical shortcut, however, hardly ever constitutes a real-world practice either in rich developed or in poorer developing economies. On the other hand, another extensive branch of economics, the public finance literature, has adopted a more realistic approach regarding the economic activity of a government. A government is viewed, among other things, as a provider of public (collective) consumption goods and/or of public inputs that enhance the productive capacity of the private sector. Being so, it can use revenues from nondistortionary (e.g., lump-sum) taxes or distortionary (e.g., consumption) taxes to finance the provision of such goods and services. Within this public finance context, a long-standing proposition states that when nondistortionary taxes are used to finance the provision of a public good, the first-best efficiency rule requires that the sum of the marginal rates of substitution (i.e., the social marginal benefit) equal the marginal rate of transformation (i.e., the social, marginal cost) (e.g., see Samuelson 1954). When distortionary taxes are used to finance the provision of the public good, Pigou (1947) argued that the social marginal cost exceeds the private marginal cost because of the induced indirect cost from raising tax revenue through distortionary taxation. Stiglitz and Dasgupta (1971), Atkinson and Stem (1974), and Wildasin (1984), among others, demonstrate that in certain cases (e.g., when the taxed and the public goods are complements in consumption), Pigou's argument fails to hold and the social cost may fall short of the private marginal cost.' Because of its more realistic appeal, this public finance approach to the use of tax revenue has been subsequently adopted by the relevant international trade and development economics literature. Recently, the efficiency rule for public good provision has been examined in the context of a small open economy by, among others, Feehan (1988) when tariff revenue finances the provision of the public good in an economy producing two traded goods and a nontraded public consumption good. Michael and Hatzipanayotou (1995) examine the same issue and derive the formulae for the optimal tax rates on traded or nontraded goods in an economy producing many traded and nontraded goods and where consumption tax revenue finances the provision of the public good. Michael and Hatzipanayotou (1997) demonstrate the failure of the first-best efficiency rule when lump-sum taxes are used to finance the provision of a public good in a small open economy in the presence of trade restrictions (i.e., a tariff or a VER). Two features in the above reviewed studies of the international trade/development economics and public finance literature motivate the present paper. First, all these studies derive the efficiency rule for public good provision in the context of a small open or closed economy with full employment. Unemployment, however, to a lesser or to a larger extent remains a structural feature of many developed or developing economies. From an analytical standpoint, the existence of such a distortion may alter both the optimal tax formulae and the efficiency rule for public good provision. Second, the above reviewed literature considers the case where a government uses a single policy instrument (e.g., lump-sum taxes, income taxes, tariffs) to finance the provision of the public good. More than often, however, governments may have at their disposal several tax instruments that they can simultaneously use in order to raise revenue for financing the provision of public consumption goods. …

Preface Introduction Erik Andre Andersen and Birgit Lindsnaes 1. Global public goods - concepts and definitions: The state and the citizen, Natural law as a public good Peter Wivel Public goods, Concept, definition, and method Erik Andre Andersen and Birgit Lindsnaes On human rights Lone Lindholt and Birgit Lindsnaes The global and the regional outlook, How can global public goods be advanced from a human rights perspective?Birgit Lindsnaes2. Peace and security: Peace as a global public good Bjorn Moller International institutions for preserving peace and security Erik Andre Andersen The law of war Rikke Ishoy The case of Bosnia and Herzegovina Erik Andre Andersen 3. State and citizen, Is good governance a global public good? Hans-Otto Sano Legal protection and the rule of law as a global public good Hans Henrik Brydensholt and Kristine Yigen Curbing corruption: A global public good, The potential of international cooperation Kristine Yigen Access to global public goods for socially and economically vulnerable groups Rie Odgaard and Kristine Yigen 4. Access to information, The right to know Anders Jerichow Internet access as a global public good Henrik Lindholt and Rikke Frank Jorgensen Research, global public goods and welfare Peder Andersen Education as a global public good Diego Bang 5. examples of implementation, Health is global - and a moving target Poul Birch Eriksen, Ellen Bangsbo, Jens Kvorning, Lene Lange, Esben Sonderstrup, Uffe Torm and Ib Bygbjerg (Fresh) water as a human right and a global public good Jannik Boesen and Poul Erik Lauridsen The international trade system Christian Friis Bach The global responsibility of private companies Henrik Brade Johansen, Helle Bank, Jorgensen and Jens Kvorning 6. Conclusion, Problems and potentials in the application of global public goods Erik Andre Andersen, Peder Andersen and Birgit Lindsnaes Appendices Index.

Les principes de protection des intérêts diffus et des biens collectifs :

Common property resources are those that are nonexcludable and rival. Various systems are possible for managing such resources, including traditional understandings and government management. When no rules limit use, the resource is open access, meaning that anyone can use it without restriction. This situation leads to overuse of the resource and sometimes to the collapse of its ecological functions. A classic case of the tragedy of the commons is overfishing of the oceans. Since there are no restrictions on access to fisheries in the open ocean, economic incentives lead to an excessive number of fishing trips. Depletion of the fish stocks results, with declining revenues for all fishers. But until economic profits (revenues minus costs) reach zero, there will continue to be an incentive for new participants to enter the fishery. This open-access equilibrium is both economically inefficient and ecologically damaging. Possible policies to respond to overuse of the open-access resource include the use of licenses or quotas. Quotas can be assigned to individual fishers and can be made transferable (saleable). While there may be situations where local-level collective action can be effective in managing common property resources, for larger-scale resources government management of open-access resources is essential. Similarly, active government policy is needed in the area of public goods provision. Public goods, once provided, benefit the general public rather than selected individuals. They include goods and services such as parks, highways, public health facilities, and national defense. No individual or group of individuals is likely to have sufficient incentive or funds to provide public goods, yet their benefits are great and often essential to social well-being. Many environmental public goods, such as forest and wetlands preservation, cannot be adequately supplied through private markets. Government intervention and public funds are needed to achieve the social benefits that flow from providing these public goods. 113The global scope of many common property resources and public goods, including the atmosphere and oceans, raises many issues regarding proper management of the global commons. New and reformed international institutions are needed to manage common property resources at the global level.

Previous articleNext article No AccessPublic Goods, Perfect Competition, and UnderproductionWilliam H. OaklandWilliam H. Oakland Search for more articles by this author PDFPDF PLUS Add to favoritesDownload CitationTrack CitationsPermissionsReprints Share onFacebookTwitterLinkedInRedditEmail SectionsMoreDetailsFiguresReferencesCited by Journal of Political Economy Volume 82, Number 5Sep. - Oct., 1974 Article DOIhttps://doi.org/10.1086/260247 Views: 40Total views on this site Citations: 27Citations are reported from Crossref Copyright 1974 The University of ChicagoPDF download Crossref reports the following articles citing this article:Se-il Mun Joint provision of transportation infrastructure, Economics of Transportation 19 (Sep 2019): 100118.https://doi.org/10.1016/j.ecotra.2019.06.001Frans A. van Vught, Marijk C. van der Wende, Don F. 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Everyday, the importance of global public goods (GPGs) is increasing in the globalization process. GPGs are public goods with benefits or costs (peace, crime, terrorism, disease etc.) that extend across countries and regions, across rich and poor population groups, and even across generations. GPGs comprehensively cover global issues such as peace and security, health, global warming, market efficiency, global financial stability, human rights, knowledge etc. GPGs affect many aspects of our lives. Many GPGs have existed outside of human intervention, such as the oceans, the ozone layer, and the atmosphere. As globalization has advanced other GPGs have come to our attention, and this has increased the capacity of cross-border influences, both in a positive and negative manner. However, the concept of GPGs is new and an agreed-upon definition is unfortunately missing. As a result, it is a priority to define and structure the growing phenomenon of GPGs. The growing force of GPGs has shown that policy decisions involving the public have been extremely positive in response to the challenges they pose (Gardiner, R. & Le Goulven K., 2001b). C.P. Kindleberger first mentioned GPGs in his article on “International Public Goods without International Government” in 1986, although, GPGs did not achieve prominence until a publication by the United Nations Development Programme (UNDP) in 1999. I. Kaul uses the term GPG to mean a public good which is non-rival and non-excludable throughout the whole world, as opposed to a public good which exists in just one national area. Knowledge is a canonical example of a GPG for him. The term GPG has also become associated with the concept of a common heritage of mankind in some academic literature. Nowadays, many crises threaten the globalization process of the world, including global conflicts, global warming, international financial stability, and growing poverty. With the globalization process, peace and security are also conceived as GPGs. During recent wars, millions of people died, and the costs incurred by the global community contained military costs, refugee costs, economic costs, instability costs, and international peace operations (Yilmaz, 2010). At the beginning of the 21st century, technological accomplishments have also given rise to fresh and unique patterns of communication, cooperation and mobilization, and discoveries in the fields of medicine and science allow the potential to make it possible for humans to lead longer, more productive and healthier lives. These benefits have been accompanied, on the other hand, by a parallel rise in threats to human security, ranging from

The article aims at giving a comprehensive overview on controlling communicable diseases (CCD) and discusses the implications of providing CCD as a global public good (GPG). After a short introductory summary of the history of CCD, Sections “PUBLIC (COMMON) GOODS” and “GLOBAL PUBLIC GOODS” offer a concise definition of the concepts of “public goods” and “global public goods”. Sections “INTERNATIONAL HEALTH REGULATIONS (1969–2005) AS A GPG” and “IHR (2005) AND CCD” critically analyse the International Health Regulations (IHR) (2005) as a means to provide CCD as a GPG, and argues that it falls short of that goal as (a) many countries are not able to provide the “Core Capacity Requirements for Surveillance and Response” because of severe deficits of their health systems, (b) the IHR do not include HIV/AIDS, tuberculosis, malaria, etc. which are a constant threat in infested regions (and to international transmission) and may be called “chronic infectious diseases” and (c) ignore the issue of fighting antimicrobial resistance. Therefore, full global health security (accepting the highest attainable standard of health as a human right) needs an integrated CCD which implied that CCD is provided as a GPG, including minimal standards of health everywhere, a “One-Health” approach, and the perspective of “Health in All Policies” (Section “TOWARDS AN INTEGRATED CONTROL OF COMMUNICABLE DISEASES AS A GPG”). Section “FINANCE OF CCD” discusses the dimension of financing CCD as a GPG and poses the question whether an enhanced transnational norm-building and solidarity can be expected. Improving CCD is not only one step towards the goal of “one healthy world”, but also depends on a comprehensive improvement of health services.

Critically studying openness: A way forward

Each operating in a presumptively general or universal register, ‘public goods’ and ‘human rights’ are amongst the most popular and visible contemporary carriers of ideas of global law and governance, and so prime sources for any broader project of global justice. Their combination, moreover, hold out the prospect of a fertile engagement between the two core concerns of modern political morality – our collective requirements and potential (public goods) and our individual dignity and well-being (human rights). Yet for all their ambition, public goods and human rights each faces the formidable challenge of placing considerations of political authority and political morality in productive balance. Exploring both, we face the frustrating phenomenon of one hand clapping – with a failure to reconcile authority and morality in a satisfactory manner. The discourse of global public goods presupposes rather than provides grounds for the relevant ‘public’, and so suffers from a general deficit of political authority, which in turn reinforces the incompleteness of its claim in political morality. The discourse of human rights, perhaps surprisingly, reveals stronger authoritative roots, but these are locally situated, and the soil becomes very thin as we move away from the state to the broader global environment and the familiar yet ethically abstracted moral discourse of universal entitlement. In conclusion, I argue, it is just because both these dimensions of global ethics, public goods and human rights, face the same type of difficulty of the grounding political authority that their conjunction in a single scheme does not allow either to compensate for the deficiencies of the other.

Public goods and human rights are sometimes treated as intimately related, if not interchangeable, strategies to address matters of common global concern. The aim of the present contribution is to disentangle the two notions to shed some critical light on their respective potential to attend to contemporary problems of globalization. I distinguish the standard economic approach to public goods as a supposedly value-neutral technique to coordinate economic activity between states and markets from a political conception of human rights law that empowers individuals to partake in the definition of the public good. On this basis, I contend that framing global public goods and universal human rights in terms of interests and values that ‘we all’ hold in common tends to conceal or evade conflicts about their proper interpretation and implementation. This raises important normative questions with regard to the political and legal accountability of global ordering in both domains. The public goods approach has responded to this problem through extending the scope of political jurisdiction over public goods to encompass all those ‘affected’ by their costs and benefits. This finds its counterpart in attempts in the human rights debate to legally account for the global human rights impacts of public goods through extending human rights jurisdiction beyond state territory. By way of conclusion I contend that both approaches are indicative of a ‘horizontal’ transformation of statehood under conditions of globalization aimed at recovering the public good beyond the international order of states.

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.

We accomplished a linear public goods experiment to study the effects of extrinsic reciprocity, via comparing a setting where subjects have the same income with a setting where they differ. We find that: 1) The contribution is higher in the two global public goods treatment than in the single global public goods experiment; 2) The subjects contribute more to the local public goods than to the global public goods; 3) When MPCR (marginal per capita return) is heterogeneous, members have a stronger will to contribute to the public goods; 4) In a certain range, the greater the gap between MPCR the more conducive to the overall public goods contribution. Our findings suggest that policy interventions may be necessary to improving intergroup cooperation with heterogeneous income and multiple public goods.

PurposeThe purpose of this paper is to analyse the role of transfers as a means to overcome inefficiencies in the provision of impure public goods. The paper employs the example of international conditional transfers targeted to overcome suboptimal low climate protection efforts by influencing the abatement technology choice of countries.Design/methodology/approachThe paper applies the Lancastrian characteristics approach and conduct numerical simulations for divergent degrees of substitutability between different characteristics. The paper takes into account climate‐protection benefits (global pollution reduction) as well as co‐benefits (local pollution reduction) of climate protection activities.FindingsThe analysis shows that individual country solution can be improved upon by making transfers from the richer countries to the poorer ones, if the latter have a lower relative preference for the global public goods (global pollution reduction) than the former. The magnitudes of such transfers will depend on the relative benefits of the global and local pollutants in the two countries. The authors also investigated the dependency of the potential for transfers on the degree of complementarity between global and local pollution characteristics. With a “Cobb Douglas” type of function used here the elasticity of substitution between the two is of course one. With a zero degree of substitutability the adjustment to a lower level of the global public good in fact starts to happen at a lower per capita income level. The scope for conditional transfers is still there, although the gains can be slightly smaller than when adjustment on the “global pollution characteristic – local pollution characteristic” margin is possible.Originality/valueThis paper is a contribution to the literature on impure public goods. In particular, the authors examine the role of international transfers in obtaining an efficient global allocation of resources in the presence of such public goods. To date the analysis of impure public goods has not examined the case of a continuum of technologies where an efficient solution requires conditional transfers, i.e. payments from one country to another to undertake a different supply of global and local public goods than the second country would wish to undertake.

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.

Why do international actors provide global public goods when they could free-ride on the production of others? Constructing Global Public Goods examines this question by understanding the identities and preferences of the actors. Most rational choice models of public goods explain the public goods decision by examining the strategic interactions among the actors. They generally avoid the question of how utilities and preferences are formed. Constructing Global Public Goods brings a constructivist approach to the study of public goods by recognizing that the actors’ utilities and preferences are socially constructed from the identities the actors take on in the choice situation. The book develops a formal model that links the interpretation of unobserved utilities to preferences for the public goods outcome. It then applies the model to case studies on global monetary management, collective security, and protecting human rights. Bringing constructivism into the public goods decision allows the analysis to look beyond the limited Prisoner’s Dilemma based model of most rational choice approaches and recognizes that the decision whether or not to produce a global public good is a complex web of social, political and cultural factors.