Trade, foreign policy, diplomacy and health

9. Global Public Goods for Health: Use and Limitations

Richard D Smith, David Woodward

Funding GPGH

  • Ideally cost of providing GPGs allocated between countries in proportion to benefits
  • Resource constraints limit ability of poor to contribute
  • This requires contributions to reflect each country’s ability to contribute
  • Major concern that this may divert ODA
  • BUT GPG concept predicated on self-interest - implies support is investment in domestic health

Ideally, the cost of providing GPGs would be allocated between countries in proportion to their benefits. However, resource constraints will limit the ability of poorer countries to contribute. This undermines the political will to co-operate and limits effective participation, impeding effective global action. Circumventing this requires financial and other contributions to reflect each country's ability to contribute, as well as its potential benefits. In practice, this means that much of the cost will be borne by developed countries.

A major concern is that GPGH may divert ODA monies rather than providing additional funding. Assuming that current aid monies are invested wisely, if the GPG concept simply led to a 'changing of the share' rather than an 'increasing of the size' of the cake, it would therefore fail in its core role to liberate additional funding for projects on a basis separate to that of ODA.

The GPG concept is predicated on self-interest - that we would all be better off if collective action could be orchestrated to produce a particular good. Thus, if some countries are unable to finance their 'part' of this collective action, the benefits to others of their involvement make it irrational to exclude them, and in many cases make it rational to fund their activity. The GPG concept implies that supporting other countries' GPGH strategies is not humanitarian aid, but investment in domestic health: while recipient countries also benefit, the primary objective for the developed countries is to improve their own health. This suggests that national health budgets are a more appropriate source of funding, leaving existing aid monies unaffected.