Trade, foreign policy, diplomacy and health

6. Public Health Infrastructure and Knowledge

John Powles, Flavio Comim

Knowledge and public health infrastructures

  • Knowledge is a vital element in public health infrastructure
  • Challenge is to ensure incentives for production whilst ensuring all may benefit
  • Two aspects of financing important:
    • subsidies and incentives for production of new knowledge
    • reduction in costs of transmission, absorption and adaptation of knowledge

Knowledge is a vital element in public health infrastructure. Once produced, it is non-rival, and under these circumstances it is not efficient to artificially exclude people from using it. In this case, the issue becomes one of how the production of such knowledge is to be achieved, as it is only through exclusion that the private sector will reap the profits needed to justify their investment in research. The paradox to be solved is thus how to ensure both the incentive to produce knowledge whilst ensuring that all may benefit from it.

One of the main (international) collective-action problems concerning public health infrastructure concerns balancing the incentives for the generation of new knowledge with the need for its optimum social provision. Attempts at universalising the provision of pharmaceutical knowledge, for example, might undermine the incentives for the protection of property rights of investments made in this field. Conversely, the undersupply of trained staff, physical infrastructure and medicines that are crucial for basic public health in poor countries should not be seen exclusively as a problem of the governments of those countries, but as part of an international division of labour that does not favour the production of these goods in all places where they are needed. International institutional solutions, rather than merely national ones, are needed to overcome this coordination problem, with private provision complemented by international arrangements that entitle countries to achieve optimum levels of social provision.

There are two forms of financing that warrant mention in this respect. First, subsidies and incentives could be given to the production of new knowledge. Second, the costs of transmission, absorption and adaptation of this knowledge could be reduced.