Global public goods: Panel ISEA at Trento Economy Festival 2024

Global Public goods

Public goods present, respect to the goods of private nature, two fundamental conditions: the non-excludability and the non-rivalry.  The non-excludability is the technical, political, and economic impossibility or the extreme difficulty to exclude someone from the consumption of the good, with positive externalities, being the costs not shared among the beneficiaries. The non-rivalry implies the possibility for the good to be consumed at the same time by more people and the consumption of an individual does not influence the possibility of others to consume at the same time the same good.

The global public goods, partially emerged from the process of globalization, are those public goods whose beneficials – or costs – involve almost all the humanity in economic terms and whose effects explicate among more generations.

The public health, the technological progress, the climatic, economic, and financial stability, the peace are all significant examples of global public goods.

In 2000 the attention for the global public goods is even more increased after the commitment that the 193 States of the UN have given to themselves to reach the Millennials Goals, which define a new model of society according to criteria of more responsibility and sustainability in social, environmental, and economic terms.

The Sustainable Development – as defined in 1987 by the Brundtland Commission – is that development that satisfies the needs of the present without compromising the capability of the future generations to satisfy own needs. For this reason, the challenge of global public goods is extremely big and actual.

ISEA has already taken the attention to Global Public Goods

Even if the global public goods are not specifically mentioned, ISEA has already touched the theme last year, realizing an event in the context of the previous edition 2023 of the Festival of the Economy of Trento titled “U.S. State Aid to businesses and the European reaction”.

In August 2022 Biden has launched the action more aggressive of ever to face the climatic crisis and enforce the energetic and economic security of the USA: the Inflation Reduction Act.

L’IRA is a big plan of industrial policy, son of the financial crisis of the 2008, of the pandemic and the war in Ukraine, that mainly consists in state aids for 370 milliards of dollars to the american firms with the aim of accompanying the digital and energetic transition and reducing inflation.

In particular the measure, subsiding the production and the consumption of electric autos and technologies for the production of renewable energies, aims to reduce the emission of Co2 of 40% by 2040, in harmony with the prevision of the Paris Agreement.

The American Government, on the model of the social market economy of Rooseveltian memory, searched, launching this package of fiscal benefits, to reposition the United States in a world in war where the globalization should be thought again, especially in an anti-Chinese perspective, and the choose where putting the supply chains becomes geopolitically relevant.

The European Union, for his part, felt threatened and discriminated from this plan, thinking to suffer for a factor of local content- the access to the benefits is possible only for the products produced in the United States and whose raw materials are extracted in the USA- an illegal competition, that would force the European firms to escape from the Old Continent and would fragment the supply chains already put to the test because of Covid, and would trigger a probable chain of anti-competitive events as well.

ISEA returns to the topic of Global Public Goods at the "Festival dell'Economia di Trento 2024".

“QUO VADIS? The dilemmas of our time” is the title Manifest which will accompany the nineteenth edition of the Festival of the Economy of Trento that will take place in Trento from the 23 to 26 May 2024.

In this context ISEA will talk again about global public goods.

The event, debate, promoted by ISEA, will face this theme: “Global public asssets, from public health to climate: national policies or cooperation?”. The debate will take place on the 25th of May and will involve illustrious exponents among which Senior Fellows of ISEA as Hamilton, Arcelli and Vicini.

Insights

Prof. Giovanni Tria, Senior Fellow at ISEA, has spoken about Global Public Goods on these occasions:

“Global public goods and industrial policy”

Beijing Forum, The Harmony of Civilizations and Prosperity for All – November 2023

There is a potential contradiction between the necessity of producing global public assets and the tendence to fragmentation and competitiveness of global markets for geoeconomically and, above all, geopolitical reasons.
Industrial policies of the States, in fact, look at the international competition rather than to cooperation and the public investments distort the private investments – useful to produce global public assets as well- following a logic of national security instead of market.
Actually the goal of ecological transition has accelerated the fragmentation of the economy because the cooperation for this goal has been insufficient: the policies of derisking could open a period of trade wars of protectionist mold between Europe, USA and China.
But this would destroy the world production in terms of efficiency, production costs and low growth.
The paradox is that, starting from the necessity of producing global assets, the main one being peace, we are moving toward a world always more conflictual.

Read the full document [PDF]

“Il finanziamento della ricerca e dell’innovazione tra beni pubblici e beni privati”

Accademia Nazionale dei Lincei, Le piattaforme della tecno-scienza – October 2022

The public and private financing of research and innovation presents contradictory characteristics as well.
The location factors of the activities of research and the mixture of production of public and private goods are determinants for the flow of public and private financial resources.
There should be a public intervention strategy, still absent, and the public funds should intervene with actions of system and co-investments in infrastructures of research and experimentation and in national and international technological hubs with private enterprises.

Read the full document [PDF]

Alexander Privitera, Senior Fellow at ISEA, has written about Global Public Goods providing us with an note on the topic, with specific attention to Europe:

"Europe’s strategic autonomy – a real goal or merely a chimera?"

May 2024

Confronted with its biggest geopolitical shock in more than 50 years, the European Union is trying to increase its defense capabilities and make its economy more resilient. Achieving the goal of greater strategic autonomy has challenged some core assumptions about the union, such as the openness of its economic model and the traditional reluctance of member states to share risks. As a result, the difficult search for a new balance between the objective of reducing dependencies and the need to pool more resources has not only strained the Franco – German relationship, arguably still the most important bilateral partnership in the EU, it has also exposed how the institutional and economic governance framework of the union, and within it, the monetary union, are still vulnerable. In large part this is because of a lack of political will in member states to complete common projects that were launched in recent times in response to previous crises. Yesterday’s unfinished business is putting additional strain on Europe’s current ability to respond effectively to its new challenges.

Read the full document [PDF]