Global Public Goods

Philipp Aerni

What is a Public Good?

Private Good(Rivalrous, Excludable)Private Sector Commoditye.g. Painting, Chocolate Bar, Car

Public Good(Non-Rivalrous, Non-Excludable)Operating Environment/ Infrastructuree.g. Museum, Food Safety, Traffic LightsPositive Externalities

How much should be provided? How should this be financed? How to measure the value?

Public Goods and its ‚Trade-offs‘ - Positive and Negative Externalities of the Private Sector

Pure Public Goods: global: clean air and water/ peacelocal/national: traffic lights, property rights

Impure Public Goods: Food security (consumption of nutritious food benefits society as a whole). Private sector is the main provider and in charge distribute/produce/consume nutritious food. Public sector is in charge where the private sector fails.

Politicized Public Goods: Agrobiodiversity, traditional knowledge, cultural identity etc. (externalities/value for whom? at what price (biodiversity vs. livelihoods?)

Should common pool resources be managed on a private basis monitored by a global trust? (Distribution of property rights to avoid Tragedy of the Commons (Hardin/Coase)

Is the private sector able to improve the quality of collective goods by making them club goods?

The Character of a Public Good

Non-excludable

Non-rivalrous

Excludable

Rivalrous

Global public good (clean air)Fighting global public bads

National Public Good

Club Good

Private good Common pool resources

knowledge

New Strategies for the Provision of Public Goods

The nature of public goods has changed as a result of technological change in the private sector making – privatization feasible and – good and bad externalities better measureable

• Technology permits smaller producers and more scope for competition (e.g. gas-fired turbine generators)

• Technology permits unbundling of physical network and related services (more competition in the provision of services)

Making the management of public goods more effective

Traditional Public Goods &Bads - public production,no exclusion, no rivalry

Rivalry

Excludability

Private Production/Technology/Market Incentives

Traditional privategoods

Privately Produced Public‚Goods‘ & ‚Bads‘Club Goods, TradeablePollution Permits