The World Bank has tabled a ‘progress report’ on global public goods, to be discussed at the Spring Meetings (available at: www.worldbank.org/springmeetings). Whilst many people welcome giving greater attention to global public goods, their definition and the scope of the Bank’s work in this area are contested. The Bank’s paper for the Annual Meetings last September was criticised by government ministers on the Development Committee for being too broad, encroaching on the turf of other organisations and being insufficiently linked to Bank country operations. Clare Short, UK Secretary of State for International Development, told the Committee that “other international institutions have specific mandates which the World Bank must respect”.
What are global public goods?
Global public goods are a new ‘big idea’ in development circles, with a number of agencies seeking to define their work in this area. Public goods are supposed to be matters which are non-rival and non-excludable, in other words where everyone benefits from their supply and maintenance. As such they cannot be produced by markets alone.
The Bank defines public goods as any activity areas which produce cross-national benefits and require cross-national collective action to achieve them. It is planning to work on 14 such issues, grouped under 5 areas:
- Communicable Diseases
- HIV/AIDS, tuberculosis, malaria and childhood communicable diseases
- Vaccines and drug development for major communicable diseases in developing countries
- Environmental Commons
- Climate change
- Biodiversity, ozone depletion and land degradation
- Promoting agricultural research
- Information and Knowledge
- Redressing the Digital Divide and equipping countries with the capacity to access knowledge
- Understanding development and poverty reduction
- Trade and Integration
- Market access
- Intellectual property rights and standards
- International Financial Architecture
- Development of international standards
- Financial stability (incl. sound public debt management)
- International accounting and legal framework
(Source: Strategic Directions for the World Bank Group Practicing Selectivity and Aligning Global/Corporate Priorities with Country Goals, Senior Management Report, February 2001)
Issues at stake
This is seen by some as little more than redefining much of the Bank’s existing work as a global public good. It is questioned whether the Bank has the legitimacy and trust from all parties to be involved in all these areas. The Bank’s funding products, mainly loans, are not suitable for financing global public goods as the latter do not yield hard currency returns. Indeed it is argued by some in the UN system, for example, that GPGs should be financed through additional resourcing from richer countries, not through traditional aid channels.
The Bank’s new paper also defines GPGs in a very broad way, and is insufficiently clear on who gains by improving their supply or on how they should be financed. In trade, for example, commentators in some leading UN agencies feel that an international trade regime is not in itself a GPG, but only if it has been designed in an open way which will ensure equitable and balanced economic outcomes. Many academic commentators do not think knowledge and Information are public goods, as knowledge advances can easily be captured for private gains, through patent systems for example. A study for the Government of Sweden last year commented: “the World Bank continues to be dominant as the main purveyor of development ideas. Although its policy prescriptions change significantly over time, a ‘the Bank can never be wrong’ mentality still prevails in much of the institution’s thoughts and actions”. (A Foresight and Policy Study of Multilateral Development Banks (MDBs) Prepared for the Ministry of Foreign Affairs, Sweden by The Institute of Development Studies, November 2000.) This approach will limit the Bank’s ability to produce analysis which reflects widespread thinking and is useful for diverse organisations.
On the global environmental commons, clearly a public good where joint action is needed, is it questionable whether the Bank can pluck up courage to confront the vested interests which are causing many of the problems, for example countries and industries which are producing carbon dioxide emissions.
The Bank’s paper talks about the need for ‘partnerships’ with other agencies and the need to integrate its newer global work with its traditional country work on policies and loans, but is not clear how this will be achieved. Two other recent reports shed light on the tensions involved in the Bank around these issues:
Former Norwegian State Secretary for Development and Human Rights, Leiv Lunde, writing with political scientist Helge Ole Bergesen, commented: “The Bank currently faces a serious overreach problem. It’s two ambitions – [to be a premier development institution helping to forge common agendas on major issues and a large-scale funder of projects] are not compatible. They require qualitatively different governing structures, the one emphasizing equal participation and open, time-consuming processes, the other requiring hierarchical order and effective decision-making” (Dinosaurs or Dynamos? The UN and the World Bank at the Turn of the Century, Earthscan, 1999, p. 190).
A recent Bank evaluation also recognised serious tensions between the Bank’s varied objectives: “At the corporate level, a scorecard connecting international development goals with Bank sector strategies and country programs has yet to see the light of day. This makes it difficult to track progress of approved programs towards international goals and corporate objectives and to ensure coherence between institutional priorities and individual country assistance strategies. This inhibits management of the tensions which inevitably emerge between the priorities articulated in sector or corporate strategies and those that result from “bottom up” consultations with country clients and stakeholders” (Annual Review of Development Effectiveness, World Bank, January 2001, p.xlv).