The World Health Organisation is calling for a massive investment by the rich governments of the world into the health of the world’s poor. This is the conclusion of a report by the Commission on Macroeconomics and Health (CMH, 2001a), launched in London on 20.12.01. The report calls for an increased investment in health of US$27 billion per year by the year 2007. It is estimated that such an investment would save 8 million lives per year. Speaking at the launch, Jeffrey Sachs, the Commission’s chair reported that the new Global Fund for AIDS, TB and malaria (see IPHN bulletin 8 http://www.iphn.org/bulletin8.html) could be one of several vehicles for delivering such funds, delivering perhaps up to 30% of the total fund needed. He said, “We need to bankrupt the Global Fund as soon as possible to demonstrate that poor countries have the absorptive capacity and to force the US government to act.” This argument has strong similarities with calls from the United Nations Development Programme [UNDP] for health to be considered a ‘global public good’ (Kaul et al., 1999). The Commission itself refers to global public goods and defines them as ‘goods whose characteristics of publicness (nonrivalry in consumption and nonexcludability of benefits) extend to more than one set of countries or more than one geographic regions (CMH, 2001a, p.190).’ One of the six working groups was specifically focused on the subject of global public goods for health (CMH, 2001a, p.151 – see http://www.cmhealth.org/wg2.htm). A particularly strong emphasis in the commission’s report was on the status of health knowledge and information as a global public good (CMH, 2001a, pp.76-86).

What are Public Goods?

The concept of dividing goods into ‘public’ and ‘private’ goods arises from classical economics and can be dated back to the 18th century. According to this concept, characteristics of public goods include:

· Non-rivalry in consumption which means that one person’s use of a good does not prevent another person from using it (Kaul et al, 1999). This is termed by some as non-divisibility (Chen et al, 1999)

· Non-excludability, i.e. use of item is available to all people/groups of people (Kaul et al, 1999)

· Non-rejectability, individuals are unable to choose to forego consumption (Preker et al, 2000)

An example of a private good might be a piece of cake. If I eat it, no-one else can (i.e. it is rival). I may chose to share it with my friends, excluding others (i.e. excludable). I may choose not to eat cake (i.e. it is rejectable). On the other hand, traffic lights might be considered an example of a public good. My use of a traffic light does not prevent others from using it (i.e. it is non-rival). Traffic lights apply to all people (i.e. it is non-excludable) and it would be almost impossible to not use traffic lights (i.e. it is non-rejectable). Other examples of public goods might include peace, law and order and good macroeconomic management. However, this distinction between private and public goods is not always that clear cut. Although some goods might be purely private or purely public, there will be some that are mixed/impure. Goods which are non-rival amongst a certain group of people can be termed ‘club goods’ and those which are available to all but are rival can be termed ‘common pool resources’ (see figure 1). These ‘impure’ goods are more common than the pure type. Consequently, the term public good is often used to include both pure and impure public goods (i.e. the shaded area in figure 1 ) (Kaul et al, 1999). Commonly, five sectors of public goods can be identified, namely environment, health, governance, security and knowledge (Te Velde, 2002).

According to neo-classical economic theory, attempting to provide pure public goods through competitive markets will lead to sub-optimal quality, quantity and price (Preker et al, 2000). Two reasons for this can be identified for this. First, individuals motivated by self-interest only will tend to ‘free ride’ concerning the provision of these goods. Secondly, individuals will tend to make sub-optimal decisions on these issues if those decisions are made in isolation from others. Effective provision of public goods requires co-operation and measures which promote communication and build trust (Kaul et al, 1999). What are Global Goods?

In many cases, it is assumed that responsibility for provision of public goods rests with the nation state. However, there may be some cases where goods are global rather than national. Suggested criteria for deciding this include the requirement that global goods are quasi-universal in terms of:

· Countries, that is they involve more than one group · People, that is they involve several/all population groups, e.g. socio-economic groups, ethnic groups, gender, religion etc.

· Generations, that is they affect current and future generations In order to assess what kind of goods might be global in this regard, it may be useful to consider problems (i.e. global ‘bads’) which fulfil those criteria, for example banking crises, Internet crime and fraud, Ill-health due to increased trade and travel, drug abuse, smoking etc. (Kaul et al, 1999). Global public goods may be considered of two types. There are final global public goods which consist of desired outcomes and may be tangible, e.g. the environment or intangible, e.g. peace. For example, the World Bank recognizes five global public goods priorities, namely communicable diseases, environmental commons, information & knowledge, trade & integration and international financial architecture (World Bank, 2001). Secondly, there are intermediate global public goods which consist of international regimes, agreements and institutions which have the aim of delivering final global public goods. Examples might include frameworks for international transport and communication, health, the environment, demographics, judicial systems, human rights and macroeconomic policy (Kaul et al, 1999).

Is an Economics-based Definition of Global Public Goods Adequate?

So far, this paper has considered the concept of global public goods from the perspective of neo-classical economics. However, the validity of defining global public goods in this way has been challenged by some people. For example, Wolfgang Reinicke, Director of the Global Public Policy Project, an economist with long experience of working in the World Bank, said, “In most societies, the spectrum of public goods goes far beyond what a classic economic definition of joint consumption and non-excludability would capture. It is far more important for the members of each society to determine - in a transparent, democratic process - what is and what is not in the public interest (Reinicke, 2001).” Supplying Global Public Goods As seen earlier, classical economic theory predicts that competitive markets will provide public goods in a sub-optimal way. This leads to the problem of how public goods, in general and global public goods, in particular can be supplied. Two key factors have been identified in determining how sub-optimal provision through markets will be. These factors are the ‘degree of publicness’ of the goods and the number of beneficiaries. The latter factor is a particular problem for global public goods whose beneficiaries number billions and who are represented by more than 180 nation states. These states have their own self-interests and there are a diverse range of interest groups within the world’s population (Kaul et al, 1999). There is therefore a strong argument for international aid to be used to finance global public goods. Three building blocks for this argument are that:

· The private sector will not provide a sufficient amount of public goods · Individual countries have insufficient incentives to make an optimal contribution to global public goods because benefits do not accrue equally nationally · Poor countries lack the resources to make a full contribution to global public goods (Te Velde, 2002)

Increasingly, the World Bank is seen as a financing mechanism through which global public goods can be provided. The Global Environment Fund would be one such example and it has been proposed that the Global Fund for AIDS, TB and Malaria be administered in a similar way (Unknown, 2002). Global public policy networks are also seen as having an important role in the area of supply of global public goods because they bring together diverse interest groups and can address transnational issues which no single group can address alone. Examples include:

· Placing issues on the global agenda, e.g. landmines, Jubilee 2000 · Facilitating setting of global standards, e.g. World Commission on Dams · Developing mechanisms for producing/sharing critical knowledge, e.g. Consultative Group on International Agricultural Research [CGIAR] · Creating markets where they are lacking, e.g. GAVI · Developing mechanisms for innovative implementation , e.g. Global Environment Facility · Creating trust and promote participation - reducing democratic deficit – an example of what happens when this fails would be the demonstrations in Seattle and against the workings of the World Bank (Reinicke, 2001).

Is health a global public good?

Traditionally, diseases can be divided into three groups, communicable diseases, communicable diseases and injuries. Because treatment of infectious diseases produces benefits to people other than those treated (termed positive externalities by economists), the control of communicable diseases has been widely considered a public good. However, because most of the determinants of non-communicable disease appear to be individual lifestyle choices, e.g. diet, tobacco use, exercise etc. treatment of these diseases is widely seen as a private good (Chen et al, 1999). However, applying strict classical economic criteria to health goods would result in very few being considered ‘pure public goods’ because most have some degree of excludability, rivalry and rejectability. For example, a vaccine given to one person is not available for another and people may choose not to be vaccinated (Preker etal, 2000).

However, even if health is accepted as a public good, much of it is likely to be seen as a national public good rather than one with global implications. For example, Te Velde considers primary health care as a national public good and only the prevention of disease spread across borders as a global public good (Te Velde, 2002). However, others have argued that health has become much more of a global public good because of a number of influences of globalization. First, increased international linkages through trade, migration and information flows not only provide opportunity for cross-border transmission of infectious agents but also allow ‘transmission’ of behavioural and environmental risks. Secondly, increased pressure on common-pool global resources, e.g. air and water, brings its own threats (Chen et al, 1999). Examples of health effects which can be considered global public goods as a result of globalization might include:

· Health effects of environmental change, e.g. global warming, ozone depletion, toxic waste disposal · Tobacco usage – this is not only influenced by individual behaviour but by global marketing campaigns · Illicit drug use – globalization has made control of drug trafficking more difficult (Chen et al, 1999)

However, all these issues are based on the same logic as focusing on the cross-border transmission of infectious disease as a global public good, namely that the causes and effects of disease, particularly in an era of globalization, are not limited to national boundaries and need to be approached on a global level. Another logic for considering health as a global public good can be considered in terms of the global imperative for poverty reduction (Te Velde, 2002). This is being used by a number of politicians as a basis for investment in health and development, for example Gordon Brown, the UK’s Finance Minister. The basis of this argument is that investment in health is a key element of an effective poverty reduction strategy and reducing poverty in poorer countries is essential if conflict is to be reduced, communicable disease controlled and environmental damage minimized. In a presentation to the UK Health and Development Forum in London in February 2002, a WHO economist distinguished between ‘health as a global public good’ and ‘global public goods for health’. For an area of health to be considered a global public good he explained that efforts to promote it would need to produce global health and economic benefits. On this basis, control of communicable disease, e.g. polio eradication is widely considered a global public good. On the other hand, there are many global public goods for health, that is global public goods which have health effects. Examples would include medical technologies, tobacco control and trade agreements. He also stressed the importance of ‘access goods’ – those goods which allow a person to benefit from a global public good. For example, a radio allows a person access to the radio waves which can be considered a global public good. He argued for health systems to be considered an access good in relation to many of the technological advances in health which could be considered global public goods (Woodward, 2002).

Conclusions It seems uncontroversial that certain aspects of health can be considered a global public good, particularly the control of infectious diseases which can spread across national borders. However, in an increasingly globalised world, it can be argued that, more and more, the cause and effects of disease are transnational. Finally, it can be argued that all of health should be considered a global public good because it is a key component of another global public good, poverty reduction, and because the global community has determined that it should so be considered. The report of the Commission on Macroeconomics and Health is not always explicit about the way it is interpreting health as a global public good. The main argument of the report is that rich countries should invest in the health of poorer countries as a way of supporting economic development and contributing to poverty alleviation. This is presumably of value to the international community and could therefore be considered a global public good. Some of this thinking is seen in statements associated with the commission which claim that controlling the diseases of the poor will promote political and social stability (CMH, 2001b). This is also seen in some of the quotes attributed to the Commissioners. For example, Manmohan Singh, a former Indian Finance Minister said, “We have an historical opportunity to combine and use resources and know-how to ensure better health and greater economic growth in just a couple of decades. If we want equity and security in our lifetime and for future generations, we cannot afford to miss this opportunity.” Takatoshi Kato of the Bank of Tokyo-Mitsubishi said, “We must begin to see development assistance more in terms of an investment in the future – in the protection of the global well-being, including peace, healthy populations, a healthy environment and a more equitable economic system (CMH, 2001c).” These statements clearly see investment in the health of poor people as contributing to a wide range of global public goods including equity, security, peace and a healthy environment. However, when the report refers explicitly to global public goods, it does so in a much more limited way, for example to refer to the work of global institutions (p.13) and the importance of health information and knowledge (pp.76-86) (CMH, 2001a).

UNDP is perhaps the lead agency in trying to promote a broadening of the concept of public goods to embrace all aspects of health, presumably in an attempt to encourage rich governments to provide additional non-aid funds for global health based on self-interest arguments. However, many NGOs have reservations about this approach. These reservations include:

· Concerns about pursuing arguments based on classical economic models · Fear of marginalizing more basic concepts such as equity and health as a human right · Fear of promoting inappropriate solutions, e.g. more stringent immigration controls as a way of controlling infectious disease · Fear of promoting vertical programmes · Risk of promoting northern agendas and further marginalizing country priorities · The confusing nature of the concepts and terms (Keith, 2002)

Discussion questions Is the concept of global public goods useful to us? How do we wish to define this? Do we see health as a global public good? On what basis do we come to that conclusion? Does this cover all aspects of health or just certain parts?