«EUI Working Papers RSCAS 2012/23 ROBERT SCHUMAN CENTRE FOR ADVANCED STUDIES Global Governance Programme-18 MULTILEVEL GOVERNANCE OF INTERDEPENDENT ...»
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The Public Goods Debates and the Issue of “Undersupply” One of the consequences of the globalization debate has been that the issue of the “public domain” has been raised in a new and more radical form than in a previous discussion in which the narrower focus on market failure framed the controversy (for two seminal contributions that proposed a wider framework, see Litman, 1990; and, from the perspective of thinking through the implications of an information society, James Boyle, 1997). The original debate occasioned by (Olson, 1965) work focused primarily on the collective action problems resulting from the non-rivalry of consumption and the non-excludability characteristics of public goods. It was indebted to some themes that had already prompted (Hume, 1970b) to emphasize the need for a “magistrate” who relies on taxation for supplying these goods rather than on voluntary contributions or sales.
The more recent debate, on the other hand, foregrounds more the conceptual problems connected with the “public” nature of the goods (see e.g. the symposium of Duke Law school on the public domain and especially J. Boyle, 2003a), and with issues of policy design in order to counteract the undersupply of certain goods for which traditionally their public character has been blamed. I think there are several reasons for such a shift in attention which, singly and in conjunction, call into question the heuristic power of the conventional public goods approach, and, as we shall see, alerts us to the dangers of employing it for policy analysis, as it can lead to faulty policy prescriptions. The reason for this failure is that this approach is too narrow in taking certain kinds of market failures as its paradigm. I claim that we need at least a political economy approach that pays particular attention to the effects of property rights in order to advance our analysis of.public policy problems. Thus while public goods are certainly a case of market failure, not everything in even that rather restricted field (when compared to the much wider “set of puzzles” raised by problems of “cooperation” in international relations) is a public goods problem. Here issues of moral hazard or of information asymmetries come to mind since they bring into focus a quite different set of issues, not to speak of the problems raised by incomplete contracting, or rent-seeking that can be adduced for explaining certain sub-optimal outcomes. Without wanting to even touch these issues let me briefly enumerate a few reasons why the classical paradigm of public goods as outlined by Samuelson and popularized by Olsen is problematic.
The first mistaken assumption is of course that goods come either as public or as private ones, i.e.
that they are defining characteristics of the goods in question, which then can be treated as if they were natural facts. This stance mystifies the constitutive process by which “goods” as well as “publics” are constructed, as (Kaul, 2012) correctly points out in this volume. I would however still go a bit farther by drawing out the implications of this “constructivist” insight. Here a second, widely shared (but erroneous) assumption comes to the fore, which allegedly determines how concepts in the social world “work” and attain their meaning. This second error compounds the flaws of the first one. I claim that the notion that ”meaning” is conveyed by reference (like bringing the “thing out there” under a concept –as in the assertion “this is a dog”) rather than by use (how does this concept, e.g.
sovereignty, link to other concepts in a semantic field, and what does it let me do i.e. does it relate to practice) is not helpful, particularly when we analyze the social world. For a further discussion of this point, see Kratochwil (2008, pp.80–99).
* Kyung Hee University, Seoul.
If we take these objections seriously we can see that there are virtually no public goods that satisfy the two criteria supposedly defining them. Take “air”, which is often mentioned as an instantiation of this concept. It becomes obvious rather quickly that air might be a “good” in ample supply, but that it certainly does not qualify as a “public good” since it does not meet the non-rivalry of consumption criterion. Otherwise we would not have pollution problems and could not try to combat them by issuing pollution certificates which are then traded in a market. Or take national security also often labelled as a public good. Here too it becomes clear that while security might be a public good for the “members” of a “public” (although the existence of forts or ramparts might make certain areas safer than others and thus might re-introduce rivalry considerations) it certainly is “no good” – neither public nor private - for those excluded. Politics might be about creating a “common thing”, the res publica or polis of yesteryear, but we should not forget that the term polis presumably derives from polizo (I build a wall) and that by “caging” people and creating a public we are able to provide security for them- but also making them eligible for retaliatory action from those in front of the gates.
Second, some of the problems created by open access to a common resource – the typical “common’s” problems (or common pool problem) are really not problems of undersupply but “overuse” that might be alleviated by the assignment of private property rights or restricting access through regulation. While of course these were the traditional ways of dealing with the problem through either “privatization” or “regulation” (public policy), a brief reflection shows that these conceptual short-cuts are not that helpful either. For one, even the assignment of private property rights is not really a “private” solution, as property rights need public enforcement and “restriction” of access might again be secured in a variety of ways, mixing public and private measures, such as issuing licenses, making use of residency requirements, putting restrictions on the sale of entitlements, setting limits on taking (enforced by social control), limiting the taking to “seasons”, employing neighbourhood watches as surveillance mechanisms, etc. If we have learned anything from the long and detailed studies of resource regimes by Ostrom et al. (1994), it is this that there is not “one size fits all” solution to these problems that could be “brought under” a “parsimonious model” of a priori reasoning which is then applied to the real world. Not only are the available solutions much more numerous, most of them lie outside of the rigid public/private dichotomy, but what works depends more on local knowledge, on customs, and on hitting on an institutional solution that embeds the specific regime in a wider set of social understandings and relations, than on an “elegant” theory.
Let us return to our preliminary objections by “testing” the public goods idea in certain policy areas. Thus problems of public health do not seem to raise issues of public goods, save in the most spurious sense. We all probably enjoy being in a society in which most people are healthy and this enjoyment is a “good” that satisfies the non-rivalry criterion but again not that of non-exclusivity. The “public” element here is rather different. It concerns issues of contagion, as each of us might become a victim. But it is not a public “bad” either in the sense of non-exclusivity, since rigid separation (exclusion) schemes can prevent the spread, as do “private” measures such disinfection and hygiene.
As far as the sub-optimal supply is concerned it results from the interaction of several factors such as the outbreak of an epidemic, of demographics (as an aging population affects the “supply” detrimentally even in the absence of an epidemic), the lack of access to prompt help, cultural inhibitions (not taking precautions, medicine), but above all from the lack of resources in both public and private budgets, i.e. mostly on “poverty “plain and simple.
The failure to reap the benefits of free trade raises still some other problems, but they too have little to do with the public goods problematique. It rather results from the “capture” of an institution by certain interests that have their “rights” ensconced and are of course, not eager to re-open the discussion about the justifiability of the original assignment, and concomitantly by an agenda which draws the bounds of sense rather narrowly and rules out challenges as “not germane” or beside the point. The downside of this privileging hegemonic move is that the present actual dangers to a free trade regime that could lead to welfare losses, are then not even appearing on the “radar screen”. As Problems of Policy-Design based on Insufficient Conceptualization: The Case of “Public Goods” Pauwelyn (2008) has argued the existing regime is still largely mercantilist (rather than liberal) as everything turns on mutual concessions, and it is “producer- driven”, i.e. the threats identified are those of national protection by which producers try to shelter their markets. This narrow conception creates resentment by the developing countries, which arrived at the table much too late in the game, and which also come largely empty handed because of their economic weakness. But this epistemic hegemony also does not see that the present calls for “protection” do longer originate in producer groups, as industry has largely internationalized and trade is increasingly intra-firm trade. The protests of today are raised rather in groups which attempt to give voice to new issues, such as the environment, human rights (here Petersmann’ plea of a decade ago should not be construed too narrowly as a ‘right to free trade” as his argument is part of a larger ‘constitutionalization’ debate, cf.