Global Public Goods
Public goods are defined as goods and services that are “non-rival” and “non-excludable”. In other words, no one can be excluded from their benefits and their consumption by one person does not diminish consumption by another. They range from street signs to a clean environment and they are provided by non-market mechanisms, such as the state or, sometimes, voluntary organizations. Because the benefits of a public good are available to everyone (no one can be excluded), there are diminishing incentives for private sector provision. Consumption by one individual or group does not reduce availability for others, so a price is difficult to set in a market context (non-rivalry).
One important argument for public subsidy of health is that there are strong society-wide benefits from environmental health and disease control interventions. Reduced levels of infection and of the vectors of disease are pure public good, being non-rival and non-excludable.
Public goods become global (sometimes called international public goods) in nature when the benefits flow to more than one country and no country can effectively be denied access to those benefits. Global public goods can be divided into two categories:
- Final public goods: these are “outcomes”, e.g. the eradication of polio.
- Intermediate public goods, which contribute to the provision of final public goods. For example, International Health Regulations aimed at stopping the cross-border movement of communicable diseases and thus reducing cross-border health risks.
The promotion and protection of cultural diversity, core labour rights, and the environment through global cooperation are also regarded as global public goods. Health-specific global public goods fall into three broad categories:
- Information and knowledge, e.g. regarding the effects of risk behaviour such as alcohol and tobacco consumption; knowledge of treatments; surveillance and information systems for communicable diseases that help control their spread.
- Control of infectious disease, e.g. because of cross-border health risks, action on HIV/AIDS or TB has global benefits.
- International rules and institutions, e.g. Sanitary and Phytosanitary Measures (Agreement on).
One of the key questions about global public goods is: how can investment in them be encouraged? Failure to provide global public goods is linked to collective action problems such as “free-riding”. The free-rider term describes a situation when no individual is prepared to pay the cost of something that others may be expected to benefit from; instead, all hope that someone else will pay for it and they will benefit for free. This is particularly an issue for research and development (R&D) into medicines to combat neglected diseases, which requires high-levels of investment. There is little market incentive to develop such medicines, as those suffering from the disease typically have low purchasing power. In addition, countries worst affected by neglected diseases tend to have little capacity or resources to invest in R&D.
The opposite of global public goods are global public “bads”. These are also non-excludable and non-rival but their reduction or removal, rather than provision, is the desirable outcome. Examples include the spread of communicable diseases and transnational drug smuggling.