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1、MDBs for GPGs|Final Report MULTILATERAL DEVELOPMENT BANKS FOR GLOBAL PUBLIC GOODS FINAL REPORT MARCH 2023 MDBs for GPGs|Final Report IMPRESSUM Published by:Oxford Economics Ltd.Berlin and Frankfurt,Germany 15 Marienstrae Frankfurt am Main,60329 Germany Description:Studies commissioned by the Deutsch
2、e Gesellschaft fr Internationale Zusammenarbeit(giz)GmbH in the sector project Multilateral Development Banks for Global Public Goods Authors:Johanna Neuhoff,Hannah Zick,Dr.Yann Girard,Helene Schle(Oxford Economics)Dr.Jakob Schwab,Dr.Peter Wolff,Dr.Hanns-Peter Neuhoff(Consultants)The authors thank a
3、ll interview partners including the World Bank and regional MDB staff as well as academic experts for their time and the valuable insights they provided.This report would not have been possible without them.Commissioned and edited by Deutsche Gesellschaft fr Internationale Zusammenarbeit(GIZ)GmbH Se
4、ctor Project Multilateral Development Banks for Global Public Goods Dr.Sebastian Wienges Funded by German Federal Ministry for Economic Cooperation and Development(BMZ)Division 403:World Bank Group,IMF,debt relief Dr.Julia Lehmann MDBs for GPGs|Final Report ABOUT OXFORD ECONOMICS Oxford Economics wa
5、s founded in 1981 as a commercial venture with Oxford Universitys business college to provide economic forecasting and modelling to UK companies and financial institutions expanding abroad.Since then,we have become one of the worlds foremost independent global advisory firms,providing reports,foreca
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7、eadquartered in Oxford,England,with regional centres in New York,London,Frankfurt,and Singapore,Oxford Economics has offices across the globe in Belfast,Boston,Cape Town,Chicago,Dubai,Dublin,Hong Kong,Los Angeles,Mexico City,Milan,Paris,Philadelphia,Stockholm,Sydney,Tokyo,and Toronto.We employ 450 f
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11、notes,and are copyright Oxford Economics Ltd.The results presented here are based on information provided by third parties,upon which Oxford Economics has relied in producing its report and forecasts in good faith.Any subsequent revision or update of those data will affect the assessments and projec
12、tions shown.To discuss the report further please contact:Johanna Neuhoff: Yann Girard: MDBs for GPGs|Final Report i EXECUTIVE SUMMARY:HOW THE WORLD BANK CAN SUPPORT GPGS Global goals require local action.Multiple past disasters have forcefully demonstrated that the world faces more and more crises t
13、hat transcend national borders and affect people worldwide.Often,the root of the crises-be it climate change,the loss of biodiversity,or pandemics-is the underprovision of so-called Global Public Goods(GPGs).Although GPGs require global collective action,their underprovision can only be tackled at t
14、he local level.While emerging economies and developing countries are often hit hardest by global crises,they also play a key role in achieving the goals that the world has set itself to approach these crises.GPG provision can require large investments,for example sustainable infrastructure developme
15、nt,but developing countries often lack the financial capacity to stem these investments on their own.Thus,the World Bank can play a key role in preventing these crises by supporting the provision and protection of GPGs in its client countries.GPGs are defined by cross-country externalities of local
16、action and are consequently underprovided.Many of the crises that the world faces and has faced in recent years derived from the problem of cross-country externalities.Greenhouse gas emissions can be economically fully utilised in the place where they are emitted but exhibit their harm all around th
17、e world.Similar logic applies to other GPGs,such as limiting the destruction of ecosystems and incurring the costs of preparing for a pandemic.Because these externalities are present,countries incentives to provide the global good in averting harm are not perfectly aligned with global needs,and GPGs
18、 are underprovided.GPGs thus have special characteristics,as i)they generally produce substantial cross-country externalities,ii)they are costly to provide or have high opportunity costs of protecting them,and iii)they generate opportunities for improving welfare through collective action.Therefore,
19、countries have strong incentives to free ride,i.e.,to invest less than what is needed to achieve a global provision level,which was optimal for all countries and was eventually agreed upon multilaterally in international regimes.Seven GPG themes are considered in this report to analyse which GPGs co
20、uld be particularly relevant for the World Bank:climate change mitigation,preservation of biodiversity and ecosystems,pandemic preparedness,prevention of violent conflicts,free trade,international tax cooperation,and financial stability.They are examples of how their provision entails substantial ex
21、ternalities on other countries,while they are costly to provide.However,some closely related areas,such as adaptation to climate change,dealing with refugee flows,or domestic resource mobilisation,do not follow a GPG logic.They deal foremost with the national results of the underprovision of GPGs bu
22、t do not exhibit externalities on other countries themselves.MDBs for GPGs|Final Report ii GPG provision needs to be anchored in international regimes.To solve the coordination problem of GPGs,international agreements or institutions are necessary to pave the way for any GPG activity.They legitimise
23、 and guide any GPG-enhancing action by specifying that there is i)a globally acknowledged need for collective action,ii)a common global target to be reached,and iii)in the best case ambitious national contribution targets for reaching global goals.The Paris Agreement,the Convention on Biological Div
24、ersity(CBD),the International Health Regulations by the World Health Organization,and the trade standards set by World Trade Organization are examples of such agreements,although many more exist.International GPG regimes alone cannot solve the underprovision of GPGs.Despite several design specificit
25、ies,international regimes in GPGs in most cases are missing a credible enforcement mechanism.As a result,there remains too little incentive for countries to provide GPGs to the globally desired extent.There are two different ways to further increase this incentive by the global community “sticks”and
26、“carrots”.First,individual countries can leverage their market power in international trade to incentivise their trading partners to provide GPGs either through GPG-related regulation of the corresponding trade flows(e.g.,European Carbon-Border Adjustment Mechanism)or through conditioning preferenti
27、al market access on the GPG provision by the respective partner countries(e.g.,Climate Clubs la Nordhaus(2015).Our empirical analysis shows that there is potential for large economies like the US and EU,but also China,for example,to increasingly use these“sticks”to foster GPG provision in their part
28、ner countries as well as their own countries.Second,financial incentives can encourage national contributions to global goals and thereby complement international regimes.Those“carrots”serve as an additional encouragement for countries to provide GPGs.The World Bank is uniquely positioned to take on
29、 the role of the financier of international regimes on GPGs in developing countries.Apart from motivating developing countries to join international regimes,the World Bank has a key role in implementing and disseminating international agreements and standards in developing countries.Adjustments to a
30、greements can be very costly(e.g.,costs for a“Just Transition”)and developing countries often lack the financial resources to deliver on regimes.Hence,to become a“Bank for the World”,the World Bank should position itself as the disseminator and financier of international regimes that align with its
31、mandate.An analysis of core regimes for GPG highlights how the World Bank already bases large parts of its work on international regimes,and its national delivery plans(e.g.,NDCs,NBSAPs,WHO Benchmarking documents for International Health Regulations capacities).Furthermore,the World Bank disseminate
32、s global minimum standards by applying them to the Banks safeguards.However,there is room for more strategic and consistent use of international agreements and standards throughout all Bank operations.Better GPG provision is key to achieving the Twin Goals set by the World Bank.Positioning the World
33、 Bank as“Bank for the World”comes with substantial synergies to its mandate reducing poverty and supporting shared prosperity in a sustainable way as well as significant benefits to its client countries.Not only do emerging economies and developing MDBs for GPGs|Final Report iii countries play a key
34、 role in the global provision of many GPGs,but they are often the ones particularly affected by their underprovision.Since the underprovision of GPGs limits the developing countries abilities to achieve national development goals(Lankes,Soubeyran,&Stern,2022)and therefore the Twin Goals of the World
35、 Bank,a strategic shift making GPG provision a centrepiece of a transformed country-based engagement model is a logical consequence to preparing the Bank as well as its client countries for the future.Economic and non-economic returns to investments in GPGs are immense.To assess which GPGs are relev
36、ant for developing countries and where the World Bank should focus its operations,the global and national costs,and the benefits of GPGs need to be reviewed.An analysis of the quantitative aggregate benefits and costs of the GPGs shows that the benefits to investments in GPGs tend to be immense,at c
37、omparably low costs.At the same time,financing needs especially in developing countries still exist.Averting climate change alone would result in yearly economic and non-economic benefits in the dimension of up to the equivalent of 10%of global GDP in 2100;the costs for averting it account for aroun
38、d 5%of global GDP until 2050 only.As emerging markets and developing economies are particularly affected by the risks of climate change,the benefits of climate change mitigation largely accrue to the developing world.Preserving biodiversity can even be more beneficial to the world,with more than 50%
39、of yearly global GDP at risk in economic and non-economic equivalents by 2050 if the loss of ecosystems cannot be stopped.Yet,preservation would cost the world less than 1%of the global GDP per year.Pandemic prevention can bring benefits through avoiding pandemics such as the Covid-19 pandemic,but a
40、lso other,more regional pandemics with global effects.The Covid-19 pandemic alone caused an estimated harm of the equivalent of 4%of global GDP over six years,and pandemics before Covid-19 had negative effects of US$237 billion per year on average.In contrast,improving pandemic prevention would cost
41、 only up to US$45 billion per year,which is less than 0.1%of the global GDP.Although estimates of the benefits and costs of GPG provision come with some uncertainty,the dimensions of the returns to investment in GPGs alone make a strong case for scaling them up.1 The selection of GPGs supported by t
42、he World Bank should be based on clear criteria.A positive cost-benefit ratio of GPG investments is not a sufficient reason for the World Bank to take on a more central role in its provision.Additional selectivity criteria need to ensure that the World Bank focuses on the most urgent challenges,to c
43、oncentrate resources and not overtax the capacities of developing countries.More importantly,the World Bank should leverage its comparative advantages as just one yet important piece of the global GPG delivery system.Thus,we propose certain criteria to select GPGs that the World Bank should focus on
44、.These criteria are based on the aggregate benefits and costs of the GPGs,they can be linked to a ratified global regime,and they are in line with the Banks mandate as their provision 1 The costs and benefits displayed are based on a literature review.The sources and additional calculations can be f
45、ound in Chapter 4.MDBs for GPGs|Final Report iv would benefit developing countries.Furthermore,there should be a GPG-specific financing gap in the World Banks client countries,where catalysing resources and partnerships can have an impact,and there should be an institutional gap at the nexus of tran
46、slating global goals into local action.In GPGs that do not meet these criteria,the World Bank should continue to play a strong role in supporting developing countries in(the Just Transition to)meeting international minimum standards and mitigating structural weaknesses,without the need to change ins
47、truments and operational procedures for this purpose.The World Bank should mainstream GPG considerations into operations.Through its safeguards,its knowledge work,and its convening power,the Bank can play a significant role in disseminating global standards and pivoting for GPG support in developing
48、 countries.Although much is already done in that regard,GPGs have to become central to all operations.As a prerequisite,GPGs need to be mainstreamed into all aspects of the World Banks work by aligning the Banks safeguards with international minimum standards.It has to be ensured that World Bank-fin
49、anced projects do no excessive harm to the GPGs in question.Consequently,certain core WBG country diagnostics and Advisory Services and Analytics(ASA)products must be mandatory for country engagement.Furthermore,the World Bank should include the targets set by international regimes for the selected
50、GPGs in its High-Level Outcomes(HLOs)as they inform country programming and the Country Partnership Frameworks(CPF)the most important strategic planning tool in the country engagement model.In the CPF,client countries and country managers negotiate projects at the intersection of the client countrys
51、 national development objectives,the Banks comparative advantages,and the HLOs.Including GPGs in the HLOs will force country directors to systematically prefer projects with positive GPG externalities over projects with no such externalities at similar levels of client-country benefits.Ambitious GPG
52、 projects or policies need additional concessional funds resulting in a price differentiation between GPG and non-GPG projects.The starting point of any re-allocation of concessional financing should be the core problem of GPGs,namely their structural underprovision that stems from the fact that a(v
53、arying)part of the benefits from GPG provision does not benefit the providing country but other countries(cross-country externalities).Given the ongoing critique of client countries on the re-allocation of concessional finance away from national development priorities,we suggest maximising the syner
54、gies between national development goals and GPG provision in the case of a given country envelope.This would maximise the cross-country externalities among projects that have a positive national profit.These projects already benefit from implicit concessionality i.e.,ASA and reduced interest rates d
55、ue to the Banks AAA rating.However,ambitious,transformative projects which tend to be very costly to the providing country and exhibit significant cross-country externalities would probably reveal a negative national profit.To support ambitious GPG provision and not divert resources from efforts tow
56、ards national development goals,we propose the allocation of additional,explicit GPG-MDBs for GPGs|Final Report v specific funding.If a significant share of the benefits occurs to other countries than the one providing it,it can only be perceived as fair and just to increase financing accordingly.Th
57、is concessionality should aim to support GPG projects with high cross-country externalities and a remaining financing gap.The more additional specific GPG funding is available,the more ambitious projects can be supported in the Banks country engagement.Specific GPG funding should be strategically al
58、located to“buy cross-country externalities”based on cost-benefit reasoning.To assess the financing gap and the cross-country externalities,every GPG project in need of additional concessionality should be supposed to develop a cost-benefit analysis(CBA).Depending on the type of project,it may be suf
59、ficient that projects or policies estimate the externalities that they provide or at least substantiate their financing needs with cost-benefit reasoning to prove their eligibility.Based on the cost-benefit reasoning,concessional finance to spur GPG provision in client countries needs to be allocate
60、d following a rules-based approach either through financing the project-specific financing gap or through a uniform subsidy per externality.Aside from the pros and cons of different allocation principles,any grant funds should be strategically used for“buying cross-border externalities”,i.e.,allocat
61、ing grants according to the measurable degree of cross-border externalities as opposed to the flat subsidy rate in the GPG Fund.Any re-launch of the GPG fund should consider this.The costs of spurring GPG provision can be much lower than their benefits.The good news is that the required financing fo
62、r GPG provision in the World Bank is much less than the benefits they generate,i.e.,the monetary value of the externalities produced.First,it is sufficient to support projects by the additional costs of GPG provision,not the value of the externalities.These costs can be low and significantly lower t
63、han the value of externalities produced in many cases.The financial support could even be lower than the additional costs of providing the GPG.This is because,second,due to their commitments in international agreements,countries have their own incentive to keep them,implying that only partial suppor
64、t against the additional costs should often be sufficient to incentivise the consideration of cross-country externalities in designing policy programmes and investment projects.Thus,“sticks”as trade benchmarks can reduce the“carrots”MDBs have to offer their client countries.The Banks knowledge work
65、should form the basis for an evidence-based GPG delivery system in developing countries.How to best provide GPGs in alignment with national development strategies and the SDGs is a major obstacle in the current GPG discourse.The knowledge work of the Bank should help overcome the perceived dichotomy
66、 of objectives between national development goals and GPGs.Knowledge of national benefits alone could already significantly increase GPG provision,particularly regarding the preservation of ecosystems.Furthermore,the World Bank can assist in knowledge creation and analytics on translating global goa
67、ls to the country level as well as in the measurement,reporting,and verification(MRV)on the ambition of national targets,compliance with international standards,and the actual implementation of national obligations.Through its global reach and MDBs for GPGs|Final Report vi the collaboration of count
68、ry operations and Global Practices,the World Bank gathers knowledge that can be central to an efficient provision of GPGs in its client countries.Sharing best practices could also greatly contribute to even further lowering the aggregate costs of GPG provision,for client countries and the World Bank
69、.Systematic incorporation of GPG considerations into World Bank operations is needed.The World Bank already is in a good position to support GPG provision.It has a comparative advantage vis-a-vis other multilateral institutions in that it has ample experience in translating global goals into local a
70、ction,and good knowledge of individual country needs to create synergies of GPG provision with national development goals.Its activities in the respective GPG areas are well-founded in comprehensive knowledge through its Global Practices and beyond.Its potential to finance on-the-ground operations m
71、akes it an ideal partner for its client countries to help finance their activities to keep their international commitments.On the other hand,GPG provision is key to the World Bank achieving its own goals as set by the Twin Goals.However,to make use of its comparative advantage and to tap the potenti
72、al that lies in a global provision of GPGs for achieving the SDGs,it has to incorporate GPG considerations into its model much more systematically.MDBs for GPGs|Final Report vii LIST OF ABBREVIATIONS C Degree Celsius ADB Asian Development Bank ADF African Development Fund AEoI Automatic Exchange of
73、Information AfDB African Development Bank AIDS Acquired Immunodeficiency Syndrome AIIB Asian Infrastructure Investment Bank ASA Advisory Services and Analytics ATAF African Tax Administration Forum BEPS Domestic Tax Base Erosion and Profit Shifting BIS Bank for International Settlements BMZ German M
74、inistry for Economic Cooperation and Development BWC Biological Weapons Convention CBA Cost-Benefit Analysis CBAM Carbon Border Adjustment Mechanism CBD Convention on Biological Diversity CCD Conference of the Committee on Disarmament CCDR Country Climate and Development Report CEF Clean Energy Faci
75、lity CEM Country Engagement Model CGE Computable General Equilibrium CIF Climate Investment Funds CITES Convention on International Trade in Endangered Species of Wild Fauna and Flora CLR Completion and Learning Review CO2 Carbon Dioxide CO2eq Carbon Dioxide Equivalent MDBs for GPGs|Final Report vii
76、i COP Conference of the Parties COP21 Conference of the Parties No.21 CPF Country Partnership Framework CPIA Country Policy and Institutional Assessment CRS Creditor Reporting System CSCC Country Social Costs of Carbon CTF Clean Technology Fund DAC Development Assistance Committee DFI Development Fi
77、nance Institution DPF Development Policy Financing DPL Development Policy Loan DPO Development Policy Operation DRM Domestic Resource Mobilisation EBRD European Bank for Reconstruction and Development EIB European Investment Bank EID Emerging Infectious Disease EMDE Emerging Markets and Developing E
78、conomies ENCD Eighteen Nation Committee on Disarmament EoIR Exchange of Information on Request ESIA Environmental&Social Impact Assessment ETM Energy Transition Mechanism Etc.Et Cetera ETF Enhanced Transparency Framework EU European Union FAO Food and Agriculture Organization of the United Nations F
79、CV Fragility,Conflict&Violence FIF Financial Intermediary Fund FILC Fundamental International Labor Conventions MDBs for GPGs|Final Report ix FSAP Financial Sector Assessment Program FSB Financial Stability Board FTE Full-Time Equivalent G20 Group of 20 G7 Group of Seven G77 Group of 77 GA General A
80、ssembly GATT General Agreement on Trade and Tariffs GAVI Global Alliance for Vaccines and Immunisation GBF Global Biodiversity Framework GCF Green Climate Fund GCFF Global Concessional Financing Facility GDP Gross Domestic Product GEF Global Environmental Facility GHG Greenhouse Gas GHS Global Healt
81、h Security GP Global Profit GPG Global Public Good GRID Green,Resilient and Inclusive Development GTP Global Tax Program GVC Global Value Chain Ha Hectare HLIP High-Level Independent Panel HLO High-Level Outcome HS Harmonised System IADB Inter-American Development Bank IBRD International Bank for Re
82、construction and Development IC Investment Cost MDBs for GPGs|Final Report x ICISS International Commission on Intervention and State Sovereignty IDA International Development Association IEG Independent Evaluation Group IEP Institute for Economics and Peace IFC International Finance Corporation IHR
83、 International Health Regulations ILO International Labour Organization IMF International Monetary Fund IMO International Maritime Organization Int$International Dollar IOSCO International Organisation of Securities Commissions IPCC Intergovernmental Panel on Climate Change IPF Investment Project Fi
84、nancing IUCN International Union for Conservation of Nature JEE Joint External Evaluations LDC Least Developed Country LIC Low-Income Country LMIC Lower-Middle-Income Country LTS Long-Term Strategy MACC Marginal Abatement Cost Curve MARPOL International Convention for the Prevention of Pollution fro
85、m Ships MDB Multilateral Development Bank MDGs Millennium Development Goals MIC Middle-Income Country MFN Most-Favoured Nation MNE Multinational Enterprises MoI Means of Implementation MRV Measurement,Reporting and Verification MDBs for GPGs|Final Report xi MTCR Missile Technology Control Regime N/A
86、 Not Applicable NAMA Nationally Appropriate Mitigation Action NAPHS National Action Planning for Health Security NBM Monetary National Benefits NBSOC Social National Benefits NBSAP National Biodiversity Strategies and Action Plan NBW National Bridging Workshop NDC Nationally Determined Contribution
87、NGO Non-Governmental Organisation NPT Non-Proliferation of Nuclear Weapons ODA Official Development Assistance ODS Ozone-Depleting Substances OECD Organisation for Economic Cooperation and Development OPCW Organisation for the Prohibition of Chemical Weapons PCT Platform for Collaboration on Tax Pfo
88、rR Program-for-Results Financing PHEIC Public Health Emergency of International Concern PLR Performance and Learning Review PPP Purchasing Power Parity PPR Pandemic Prevention,Preparedness,and Response PRTP Pure Rate of Time Preference PVS Performance of Veterinary Services QALY Quality-Adjusted Lif
89、e Year R2P Responsibility to Protect RDB Regional Development Bank REDD+(Reducing Emissions from Deforestation and Forest Degradation in Developing Countries MDBs for GPGs|Final Report xii RPG Regional Public Good RTA Regional Trade Agreement SBN Sustainable Banking Network SCC Social Cost of Carbon
90、 SCD Systematic Country Diagnostic SDDS Special Data Dissemination Standard SDG Sustainable Development Goal SESA Strategic Environmental&Social Assessment SESMP Strategic Environmental and Social Management Plan SPAR Self-Assessment Annual Reporting SPF State and Peacebuilding Trust Fund SSP Shared
91、 Socioeconomic Pathways STAR Strategic Tool for Assessing Risks TA Technical Assistance TEEB The Economics of Ecosystems and Biodiversity TFA Trade Facilitation Agreement TRIPS Agreement on Trade-Related Aspects of Intellectual Property Rights UAE United Arab Emirates UCDP Uppsala Conflict Data Prog
92、ram UN United Nations UN ECLAC United Nations Economic Commission for Latin America and the Caribbean UNCTAD United Nations Conference on Trade and Development UNDP United Nations Development Programme UNEP United Nations Environment Programme UNFCCC United Nations Framework Convention on Climate Ch
93、ange UNGA United Nations General Assembly UNICEF United Nations Childrens Fund UNODA United Nations Office for Disarmament Affairs MDBs for GPGs|Final Report xiii UNSG United Nations Secretary-General US United States US$United States Dollar WBG World Bank Group WHA World Health Assembly WHO World H
94、ealth Organization WITS World Integrated Trade Solution WOAH World Organisation for Animal Health WRI World Resources Institute WTO World Trade Organisation Yr Year MDBs for GPGs|Final Report xiv TABLE OF CONTENTS EXECUTIVE SUMMARY:HOW THE WORLD BANK CAN SUPPORT GPGS.I LIST OF ABBREVIATIONS.VII TABL
95、E OF CONTENTS.XIV LIST OF FIGURES.XVI LIST OF TABLES.XVIII LIST OF BOXES.XIX 1.MOTIVATION FOR THIS STUDY.1 2.SETTING THE STAGE.3 2.1.The Global Context:Pressing Global Challenges Demand a Reaction.3 2.2.Defining Global Public Goodsfrom Theory to Practice.4 2.3.GPGs Considered in this Study.10 2.4.Su
96、stainable Development Goals and GPGs.20 2.5.GPG-Specific Spendingan Analysis of ODA Flows.23 2.6.Roadmap Ahead.32 3.DISSEMINATION OF GLOBAL STANDARDS.33 3.1.International Regimes as a Means for Collective Action.34 3.2.Taking StockCore Regimes for MDBs GPG Work.50 3.3.MDBs and International Regimes
97、for GPG Provision.81 3.4.Just Transition as Important Success Factor.93 3.5.When the Carrot is not Enough.107 3.6.Conclusion:Learnings for the Provision of GPGs by MDBs.118 MDBs for GPGs|Final Report xv 4.QUANTIFYING ECONOMIC BENEFITS AND COSTS OF GPGS.119 4.1.Cost-Benefit Analysis for GPGs at the P
98、roject Level.122 4.2.Methodological approach to Quantifying GPG Benefits and Costs.126 4.3.Climate Change Mitigation.129 4.4.Preservation of Biodiversity.146 4.5.Pandemic Preparedness.155 4.6.Prevention of Violent Conflict.164 4.7.Free Trade.174 4.8.International Tax Cooperation.180 4.9.Stable Finan
99、cial Architecture.186 4.10.Conclusions.192 4.11.Recommendations for MDBs Concessional Finance for GPGs.196 5.INSTITUTIONAL MODELS FOR THE PROVISION OF GPGS.203 5.1.GPG Provision in the MDB System The Status Quo.203 5.2.Challenges for the GPG Agenda in the World Bank.209 5.3.Recommendations for a GPG
100、 Alignment at the World Bank.224 BIBLIOGRAPHY.254 6.APPENDIX.280 6.1.Additional Tables and Figures.280 6.2.Country Classification According to GPG Relevance.289 MDBs for GPGs|Final Report xvi LIST OF FIGURES FIGURE 1:DEFINING PROBLEM OF UNDERPROVISION IN GPGS.9 FIGURE 2:DEFINING AND COMPARING GOODS.
101、10 FIGURE 3:SEVEN GPG THEMES.11 FIGURE 4:TOTAL ODA SPENDING AND GPG SHARE BY DONOR(2011-2019).26 FIGURE 5:SPENDING ON GPG PROVISION BY GPG AND DONOR(2019).29 FIGURE 6:DISBURSEMENTS TO GPG SECTORS BY MULTILATERALS(2019).30 FIGURE 7:MULTILATERALS SPENDING ON GPGS BY TYPE(2011-2019).31 FIGURE 8:AN ILLU
102、STRATIVE EXAMPLE USING GREENHOUSE GASES.35 FIGURE 9:INTENDED IMPACT OF POLICY OPTIONS.36 FIGURE 10:POLICY OPTION STRATEGY SPACE.37 FIGURE 11:INTERPLAY OF AGREEMENTS,STANDARDS,AND TRADE BENCHMARKS.43 FIGURE 12:LINKING GLOBAL GOVERNANCE,INTERNATIONAL RELATIONS,AND REGIMES.44 FIGURE 13:GPG DELIVERY SYS
103、TEM.46 FIGURE 14:ARTICLE 13 OF THE PARIS AGREEMENT:TRANSPARENCY OF ACTION AND SUPPORT.58 FIGURE 15:JURISDICTIONS WITH MANDATORY ASSESSMENTS.79 FIGURE 16:ILLUSTRATION OF THE 2030 PROVISION GAP.84 FIGURE 17:EMPLOYMENT EFFECTS OF CLIMATE POLICIES.94 FIGURE 18:CLIMATE CHANGE MITIGATION TRADE FLOWS BETWE
104、EN TOP 20 EXPORTERS AND IMPORTERS(BILLION US$).110 FIGURE 19:PRESERVATION OF BIODIVERSITY-TRADE FLOWS BETWEEN TOP 20 EXPORTERS AND IMPORTERS(BILLION US$).112 FIGURE 20:FAIR TRADE TRADE FLOWS BETWEEN TOP 20 EXPORTERS AND IMPORTERS(BILLION US$).114 FIGURE 21:BASIC QUANTITATIVE GPG METRICS AND THEIR AP
105、PLICATIONS.121 FIGURE 22:COSTS OF GPG PROVISION BY PROJECTS.129 FIGURE 23:ESTIMATES OF THE TOTAL IMPACT OF CLIMATE CHANGE PLOTTED AGAINST THE GLOBAL MEAN SURFACE AIR TEMPERATURE.131 FIGURE 24:TEMPERATURE-DAMAGE RELATIONSHIP.132 FIGURE 25:GLOBAL SURFACE TEMPERATURE CHANGE RELATIVE TO 1850-1900.132 FI
106、GURE 26:KERNEL DENSITIES FOR THE SCC FOR ALL STUDIES AND STUDIES BEFORE OR AFTER AR4 FOR THREE ALTERNATIVE PURE RATES OF TIME PREFERENCE(PRTP).135 FIGURE 27:SSC($/TCO2)UNDER NINE DAMAGE FUNCTIONS.136 FIGURE 28:VULNERABILITY TO CLIMATE CHANGE ACROSS THE WORLD.138 FIGURE 29:GLOBAL GHG EMISSIONS BY SEC
107、TOR IN 2018.140 FIGURE 30:GHG ABATEMENT POTENTIAL AND COSTS BY SECTOR.142 MDBs for GPGs|Final Report xvii FIGURE 31:REGIONAL DISTRIBUTION OF RISKS FOR NET-ZERO TRANSFORMATION.144 FIGURE 32:ECOSYSTEM SERVICE VALUES BY BIOME.148 FIGURE 33:SHARE OF GLOBAL EXTERNALITIES BY BIOME.150 FIGURE 34:BIODIVERSI
108、TY FINANCING NEEDS BY CATEGORY.152 FIGURE 35:BIOMES AROUND THE GLOBE.153 FIGURE 36:ECONOMIC IMPACT OF COVID-19 BY COUNTRY CLASSIFICATION.158 FIGURE 37:HEALTH EXPENDITURES BY COUNTRY INCOME GROUP.159 FIGURE 38:PANDEMIC PREPAREDNESS BY COUNTRY.161 FIGURE 39:PER CAPITA FINANCIAL GAP FOR COVID-19 VACCIN
109、E DELIVERY.162 FIGURE 40:SCARRING EFFECTS OF WARS ON POTENTIAL OUTPUT LEVELS.166 FIGURE 41:FATAL EVENTS IN 2021 BY TYPE OF VIOLENCE,WORLD.172 FIGURE 42:TARIFF RATES BY GDP PER CAPITA.177 FIGURE 43:TRADE FACILITATION PERFORMANCE BY COUNTRY.178 FIGURE 44:GDP GROWTH RATES BY COUNTRY IN 2009.188 FIGURE
110、45:COSTS OF FSB ASSESSMENT BY SIZE OF FINANCIAL SECTOR.190 FIGURE 46:BANK ASSETS TO GDP BY COUNTRY.191 FIGURE 47:RANGE OF EFFICIENT FINANCIAL SUPPORT.198 FIGURE 48:COUNTRY ENGAGEMENT CYCLE.236 FIGURE 49:CPF SELECTIVITY FILTER.238 FIGURE 50:THE PROJECT CYCLE OF THE WORLD BANK.240 MDBs for GPGs|Final
111、Report xviii LIST OF TABLES TABLE 1:POTENTIAL INTERDEPENDENCIES BETWEEN THE GPG THEMES.17 TABLE 2:SDG AND GPG MAPPING.21 TABLE 3:LIST OF RELEVANT INTERNATIONAL REGIMES FOR GPG PROVISION.53 TABLE 4:SUMMARY OF THE WORLD BANKS CURRENT ROLE IN GPG REGIMES.81 TABLE 5:THEORETICAL FINDINGS FOR REGIME FORMA
112、TION AND POTENTIAL IMPLICATIONS FOR MDBS.86 TABLE 6:THEORETICAL FINDINGS FOR REGIME LEVERAGING AND POTENTIAL IMPLICATIONS FOR MDBS.90 TABLE 7:AGGREGATOR TECHNOLOGIES,GPGS,PROGNOSIS,AND RECOMMENDATIONS.92 TABLE 8:THE MDB SUITE CAN BE EFFECTIVELY TARGETED AT SOME OF THE KEY INVESTMENT THEMES OF A JUST
113、 TRANSITION.102 TABLE 9:CHALLENGES AND SUCCESS FACTORS JUST TRANSITION.103 TABLE 10:CROSS GPG TRADE COUNTRY OVERVIEW.117 TABLE 11:ABBREVIATIONS FOR CBA.125 TABLE 12:REGIONAL SCC.139 TABLE 13:METRICS:CLIMATE CHANGE MITIGATION.145 TABLE 14:METRICS:PRESERVATION OF BIODIVERSITY.155 TABLE 15:METRICS:PAND
114、EMIC PREPAREDNESS.163 TABLE 16:COMPOSITION OF THE GLOBAL ECONOMIC IMPACT OF VIOLENCE(2020).169 TABLE 17:METRICS:PREVENTION OF VIOLENT CONFLICT.173 TABLE 18:METRICS:FREE TRADE.180 TABLE 19:SHIFTED PROFITS BY ORIGINATING COUNTRIES(2018).182 TABLE 20:LIST OF TOP 15 CORPORATE TAX HAVENS ACCORDING TO TAX
115、 JUSTICE NETWORK.184 TABLE 21:METRICS:INTERNATIONAL TAX COOPERATION.186 TABLE 22:METRICS:STABLE FINANCIAL ARCHITECTURE.192 TABLE 23:OVERVIEW OF THE GPG BENEFITS.193 TABLE 24:WHICH GPGS SHOULD THE WORLD BANK FOCUS ON?.231 TABLE 25:MATCHING OF ODA SECTORS AND GPGS.280 TABLE 26:MATCHING OF PRODUCTS TO
116、GPGS.281 TABLE 27:ECOSYSTEM SERVICES AND MATCHING TO TYPE(DOMESTIC AND EXTERNALITY).285 TABLE 28:DATA SOURCES FOR GPG PROVISION INDICATORS.287 TABLE 29:AGGREGATOR TECHNOLOGY PER SUB-CATEGORY.293 TABLE 30:INDICATOR FOR PROVISION LEVEL AND AGGREGATOR TECHNOLOGY PER SUB-CATEGORY.294 MDBs for GPGs|Final
117、 Report xix LIST OF BOXES BOX 1:ILLUSTRATION OF THE PRISONERS DILEMMA.6 BOX 2:EXAMPLES FOR SECTORS PER GPG CATEGORY.25 BOX 3:MEASURING SPENDING ON GPG PROVISION USING ODA.27 BOX 4:THE PARIS AGREEMENT:AN INTERNATIONAL GPG-REGIME.42 BOX 5:RECOMMENDATIONS FOR SUPPORTING THE IHR STANDARDS IN THE WORLD B
118、ANK.68 BOX 6:CONFLICTING SDGS AND GPGS CAUSING THE NEED FOR A JUST TRANSITION.97 BOX 7:THE ADBS ENERGY TRANSITION MECHANISM.101 BOX 8:THE WBS ESKOM JUST ENERGY TRANSITION PROJECT.104 BOX 9:METHODOLOGY FOR THE PRODUCT-SPECIFIC GPG-TRADE ANALYSIS.108 BOX 10:SPECIAL CASE:DECIDING BETWEEN TWO PROJECTS.1
119、24 BOX 11:SOCIAL DISCOUNTING.134 BOX 12:A QUICK INTRO TO THE WORLD BANKS GPG FUND.214 BOX 13:A QUICK LOOK AT THE“BIG FIVE”.217 BOX 14:INCREMENTAL COST ASSESSMENTS IN THE GEF.222 BOX 15:AFRICAN DEVELOPMENT FUND REGIONAL OPERATIONS SELECTION AND PRIORITISATION GUIDELINES.223 BOX 16:ILLUSTRATION OF THE
120、 CBA FROM A GLOBAL AND A NATIONAL PERSPECTIVE:THE WBS ESKOM JUST ENERGY TRANSITION PROJECT IN SOUTH AFRICA.248 BOX 17:SIX LEARNINGS WHY A COST-BENEFIT ASSESSMENT IMPROVES PROJECT DESIGN.252 MDBs for GPGs|Final Report 1.MOTIVATION FOR THIS STUDY Many of the biggest challenges in our world today cross
121、 borders and pose,in some cases,existential risks for our societies.Climate change,biodiversity loss,pandemics,fragility,and conflict,forced displacement disproportionately affect people worldwide.These transboundary challenges are ultimately caused by the structural underprovision of so-called Glob
122、al Public Goods(GPGs).The role of GPGs becomes even more relevant in our increasingly interconnected and interdependent world,amplifying the impact of externalities.Co-dependent economies and societies benefit or harm one another mutually,depending on the type of externality.2 Positive externalities
123、 increase welfare across countries and need to be supported to realise the optimal provision level of the specific good.3 Although the debate on GPGs has been present in the international discourse since the 1990s(see,for example,Kaul et al.(1999),Sandler(1998),and Stiglitz(1999),our existing multil
124、ateral financial architecture was not designed to address these types of transboundary challenges.Yet,because of their cross-country nature,they can only be solved by concerted global action.Since the mid-20th century,several supranational institutions(organisations,regimes,and agreements)have been
125、set up to solve this coordination problem,namely the United Nations system,the Bretton Woods organisations,and many global and regional agreements,funds,and initiatives.Voices have been growing louder calling for MDBs to take on a more central role in the provision and protection of GPGs.MDBs are co
126、mpelling candidates to work on cross-border collective action problems.As one of the leading global institutions with a large membership base and a global mandate,the World Bank in particular is well-placed to address transnational challenges in a concerted manner(Kanbur,2016).Long-term sustainabili
127、ty and cost-effectiveness require that the incentives of countries be aligned with the integration of global and regional programmes.This requires coordination and synergy between national and transnational development efforts in an institution designed for this purpose(Ferroni&Mody,2002).The World
128、Banks country engagement model(CEM)offers the unique possibility to implement measures required for global action at the country level.However,there are also concerns raised about integrating GPGs into the World Banks business model.Being primarily a financial intermediary,the provision of GPGs is n
129、ot something that is 2 An externality describes a positive or negative affect of an economic act on a third party not associated with the act.The pollution caused by a factory,for example,is a negative externality affecting the local population.3 Of course,negative externalities do exist as well and
130、,in many cases,such as climate change,they are the more intuitive way to think about GPGs.Conceptually,they are the other side of the coin when analysing GPGs in many cases.The positive externalities of mitigating climate change,for example,are the opposite counterpart to the negative externalities
131、associated with not mitigating climate change.MDBs for GPGs|Final Report 2 currently at the core of its business model(Kopiski&Wrblewski,2021).Furthermore,the loans can be limited in incentivising ambitious GPG projects with cross-country externalities.Hence,the guiding question for this report is h
132、ow MDBs in general and the World Bank in particular could better support overall GPG provision by leveraging their comparative advantages.Integrating the GPG perspective could even contribute to the World Banks existing mandate.The Banks Twin Goals eradicating extreme poverty and boosting shared pro
133、sperity in a sustainable manner need to be interpreted against the reality of the transboundary challenges of GPGs.A vision for the World Bank as a“Bank for the World”would recognise that sustainable prosperity and the achievement of the Sustainable Development Goals(SDGs)are closely linked to the p
134、rovision and protection of global public goods(GPGs).Most SDGs are based on or represent GPGs.This report brings together the analysis of three studies that analyse a specific aspect of the guiding questioneach of which results in recommendations for the World Bank.These studies form the chapters of
135、 this report and include a study on how international standards can be disseminated and what the economic benefits of a GPG provision are.The final part of this study brings together the results of the first chapters and ends with recommendations on how MDBsand the World Bank in particularcould bett
136、er support the global provision of GPGs.Moreover,another study analyses 20 good practice case studies for GPG-specific operations supported by MDBs across the globe.General findings drawn from that study of good practice examples will be used for the present report as well.MDBs for GPGs|Final Report
137、 3 2.SETTING THE STAGE 2.1.THE GLOBAL CONTEXT:PRESSING GLOBAL CHALLENGES DEMAND A REACTION The new debate about GPGs must be seen in a wider context of recurrent emergencies,with managing the respective economic,health,and environmental risks as a permanent task.Against this background,it is imperat
138、ive to rethink the international governance structures and re-define the specific role of international financial institutions(IMF,MDBs)in the wider context of the UN system,the G7/G20/G77,and the multilateral system at large.The UN Secretary-Generals report Our Common Agenda calls for a new“global
139、deal”to deliver global public goods and address major risks(UNSG,2021).The report announced the formation of a High-Level Advisory Board on Effective Multilateralism(HLAB)”.to identify global public goods and other areas of common interest where governance improvements are most needed and to propose
140、 options for how this could be achieved”(UNSG,2021,p.4).In its fifth statement,before releasing the final report in April 2023,the HLAB announces to“put forward suggestions that make governance structures and decision-making in international financial institutions more inclusive and representative.A
141、nd we will advocate changes that support the rapid mobilization of capital from public and private sources at the scale required to deliver transformational change.”.4 Several proposals have been made for new institutions to govern a fragmented global system,such as a global economic security counci
142、l,a global resilience council,and others.The UNSG also proposes the establishment of a Biennial Summit at the level of Heads of State and Government between the UN Economic and Social Council,the G20,and the heads of IFIs.Such a gathering could improve coordination between financial and sustainabili
143、ty issues and encourage the resolution of topics like international debt but also boost investment in a green and just path to prosperity(Beisheim&Weinlich,2022).The summits would bring the global finance system better into line with global priorities such as the 2030 Agenda,tackling inequality,and
144、climate change,tasks whichin the view of many observersare not tackled sufficiently or at least not in a balanced way.However,it can be questioned that there will be a substantial revamp of the structure of international institutions,given the current geopolitical tensions.Most probably,there will b
145、e a continuation of the interplay between the UN system as a major coordinating and convening body with a widely accepted legitimacy for setting international standards through its specialised institutions,and the major multilateral financing institutions with the MDBs and several thematic Global Fu
146、nds as funders in the context of agreed global goals(SDGs,Paris Agreements 1.5C goal,Kunming-Montreal Global Biodiversity Framework,GPGs).4 https:/highleveladvisoryboard.org/fifth-statement-by-the-co-chairs-six-transformational-shifts/MDBs for GPGs|Final Report 4 In practice,the tasks of institution
147、s are often blurred,because the funding capacities of MDBs entail to a large extent also convening and standard-setting power(also in terms of policies)which is partly anchored in their mandate and partly developed as a reaction to emerging challenges.2.2.DEFINING GLOBAL PUBLIC GOODSFROM THEORY TO P
148、RACTICE As has already been demonstrated,some of our current most pressing global challenges are characterised at their core by GPGs.Although in real life,the characteristics of GPGs may not be so clear cut,looking at the challenges through the lens of theory makes it possible to analyse them system
149、atically,identify the problems involved,and develop approaches to solving them.GPGs can be defined by the interplay of key properties that essentially distinguish them from other ordinary goods.These properties are their non-rivalry and/or their non-excludability causing cross-country externalities,
150、which result in their structural underprovision globally.THE PUBLIC NATURE OF GPGS MANIFESTS IN EXTERNALITIES Most goods be them consumption goods that are depleted when consumed or capital goods that are not depleted when consumed are characterised by the fact that they are rival in consumption and
151、 that others can be excluded from their consumption.5 The more person A consumes a pizza the less of the same pizza can be consumed by person B,or a specific machine can only be used by one company for their production(rivalry).At the same time,both can be physically entrenched such that others cann
152、ot(at a reasonable cost)appropriate them for their own consumption(excludability).These goods are thus considered private goods.Other goods are either not rival or not excludable,or neither.The air that we breathe is non-rival because someone else breathing does not affect any persons possibility to
153、 breathe(up to a certain point,which practically holds for all goods that are non-rival in principle).Moreover,it is difficult to exclude anyone from breathing the air surrounding us.Fresh air thus constitutes a pure public good.Other goods may not be private goods,but only carry one of the characte
154、ristics of non-rivalry or non-excludability,but not the other,and these to differing degrees.Depleting resources(rival in consumption)from whose consumption no one can be excluded at a reasonable cost(such as fishing grounds and other natural but not regionally confined scarce resources)are consider
155、ed common goods.And while public streets are typically considered pure public goods,the existence of toll roads shows that their degree of excludability depends on the setting,although their consumption is equally non-rival(again,up to a certain point).Goods that are non-rival but excludable,are clu
156、b goods.5“Consumption”here and throughout the report describes the act of using something to ones own utility.A“good”is similarly understood in a broad way,comprising all material and non-material entities that carry characteristics that potentially affect utility when being used.MDBs for GPGs|Final
157、 Report 5 Whether a good is considered a common good,a club good,or a public good is often a matter of perspective in practice.A non-changing climate is a pure public good that is non-rival in theory.Then again,there is an exogenous threshold that determines how much CO2 can be emitted to ensure a r
158、elatively stable climate(e.g.,do not reach tipping points).The threshold causes rivalry in consumption:Any GHG emitted reduces the amount of GHG emissions left for others.Consequently,the climate becomes a common good.What they all public goods,common goods,and club goods share is that their product
159、ion,or“provision”,entails external effects on others,as it directly influences their utility6 (WB,2007).Thus,the first defining property for our GPG definition throughout this report is,whether providing a good induces externalities.GOODS WITH EXTERNALITIES INCENTIVISE FREE RIDING WHICH LEADS TO THE
160、IR UNDERPROVISION Private goods can be freely traded on the market,such that their characteristics determine how much people are willing to pay for them.This fully determines the incentives for producers(providers)of these goods to produce(provide)the goods and thus aligns the incentives of producer
161、s and consumers.This is different for public goods,as there usually is no market for externalities.Thus,people who experience externalities do not contribute to the incentives of producers(providers)of public goods.In the case of positive externalities,they would in theory be willing to contribute t
162、o(pay for)the provision of the good;in the case of negative externalities,they would be willing to pay for not having to experience the externalities.However,even if there were mechanisms for voluntary contributions to the provision(avoidance)of the public good,people would not be willing to contrib
163、ute by themselves,because they know that they can“free-ride”on the contributions of others,as others will free-ride on their contributions.The consequence of exchange over externalities being not efficiently possible is that the incentives for provision are not aligned with the interests of the cons
164、umers.In the case of positive externalities,thus the interpretation of a public“good”,results in an underprovision of the good compared to the social optimum.The problem of structural underprovision can also be viewed from a slightly different,but complementary angle:If there are(at least)two potent
165、ial providers of the public good,and both take utility from the provision of the respective other,both will not be willing to provide the good to an extent that fully takes into account the effect on the other individual,resulting in a reciprocal underprovision of the good compared to the social opt
166、imum.This logic can be illustrated in the famous prisoners dilemma described in Box 1.6 In theory,it can be argued that club goods do not exhibit direct external effects,because the use by others can be restricted.In practice,however,already the possibility to consume may affect utility,and the numb
167、er of consumers may in turn affect the efficiency of the provision of a club good,in addition to that the degree of excludability is often imperfect.We will thus consider club goods as goods of which the provision entails external effects as well throughout this report,but this distinction is not ce
168、ntral to the main findings therein.MDBs for GPGs|Final Report 6 BOX 1:ILLUSTRATION OF THE PRISONERS DILEMMA The prisoners dilemma illustrates the coordination problem of a public good.Imagine that the police arrested two criminals for a crime they committed together.The police do not have enough evi
169、dence to convict them on the principal charge.The criminals,A and B,are confined separately with no way to communicate or coordinate with each other.Each prisoner can choose to remain silent or confess the crime.The resulting prison sentences for each choice combination are depicted in the payoff ma
170、trix below.For example,if A remains silent and B confesses(upper right cell),A will receive a prison sentence of 10 years and B will get 0 years.Irrespective of what B does,it is always individually rational for A to confess:If B remains silent,A should confess(0 years of prison)rather than remain s
171、ilent(1 year).If B confesses,it is again better for A to confess(5 years)than to remain silent(10 years).The same is true for B.The resulting Nash equilibrium is thus the one where both A and B follow the strategy that they think would be the bestthey confess.Both prisoners would be better off if th
172、ey cooperated and remained silent(both receive one year instead of five).In other words,the Nash equilibrium is not Pareto efficient,which would be a solution that increases the welfare of both without making anyone else worse off.The individually rational solutionthe Nash equilibrium(blue outcome)i
173、s not overall desirable as another solution is more Pareto efficient(green outcome).The general idea of this dilemma also applies to GPGs as well.From the perspective of a single country,it is individually rational for a country to decide to not cooperate and to contribute next to nothing in terms o
174、f GPG provision.As a result,all countries choose to contribute too little and decide to free-ride on the other countries provision of GPGs.However,from a collective standpoint,every country would benefit if everyone increased their GPG provision.MDBs for GPGs|Final Report 7 THE GEOGRAPHICAL RANGE OF
175、 EXTERNALITIES DETERMINES MATTER AS WELL The geographic reach of the externalities determines whether a public good is local,national,regional,or global.7 For example,while local public goods affect a group of individuals(e.g.,waste collection within a city),regional public goods extend to a group o
176、f countries(e.g.,regional security alliance).In this vein,regional public goods are defined as those goods that are transnational but whose benefits are limited to the countries directly involved(Byiers,Cazals,Medinilla,&de Melo,2021).Thus,the second defining GPG criterium is that the externalities
177、exhibited are global.Benefits from local measures to mitigate climate change,for example,spill over to other countries and regions across the globe(cross-country externalities).However,distinguishing regional and GPGs in practice is challenging.Following the theory,regional measures for the surveill
178、ance and containment of communicable diseases,for instance,primarily affect several domestic health systems and the respective local populations.Given the eventuality of a pandemic threat,these originally regionally intended actions could be based on a preventive logic and produce cross-regional and
179、 thus global benefits.As a result,regional public goods bearing the risk of developing global externalities will also be considered in this study.THE UNDERPROVISION OF GPGS IS AGGRAVATED BY THE FAILURE OF SUPRANATIONAL GOVERNANCE The first-best solution to the problem of the structural underprovisio
180、n of public goods is binding regulation.This can happen either in the form of binding rules on socially optimal behaviour to solve the prisoners dilemma or by allocating property rights to externalities and implementing a market exchange mechanism.The latter may take place by allocating rights to no
181、n-provision or by assigning the rights of those experiencing the externalities that they are entitled to,thus increasing the respective sides wealth by the market value of the rights to the externalities.Both solutions require an authority that can enforce the respective mechanism,which is typically
182、 a national government,or an institution installed by it.While the general logic of under-provision in public goods can be applied to GPGs,it must be modified because the increasingly globalised international sphere is subject to constraints that exacerbate the market-based collective action problem
183、 of national public goods.First,insights from neighbouring disciplines indicate that the economic market failure inherent in public goods is complemented by a failure of the international political market(Kaul,2012).In the case of GPGs,no single institution exists that has extensive power to interve
184、ne on a global level,as there is no supranational equivalent to a national government.In the absence of such an institution,countries,international regimes,and institutions have to negotiate and cooperate voluntarily to address challenges like climate change collectively.However,in todays increasing
185、ly interconnected multipolar world with a large number of decisive self-7 Figure 2 further below depicts the most important types of goods that are characterised by varying degrees of non-rivalry and non-excludability.MDBs for GPGs|Final Report 8 interested states,negotiations are becoming more diff
186、icult(Kaul,2012).In contrast to national public goods,it must also be stated that the vast number of beneficiaries of global public goods are subject to stark heterogeneity.Cultural,political,and economic differences between countriesnot least concerning fairness preferences or redistributive implic
187、ations of measures to mitigate climate change,for instancelimit the incentives to deviate from domestic interests.While those causing climate change can protect themselves from the negative impact the longest,the most affected countries in the global South lack the economic capacity to reduce the ne
188、gative impact of climate change.In addition to these political issues,there are also limitations due to the underlying aggregator technology of certain GPGs(Buchholz&Sandler,2021).The aggregator technology determines how important a country is for the overall supply of a GPG(see further elaboration
189、in Chapter 3.3.3).For example,one of the reasons why combatting climate change is an extremely difficult challenge is its aggregator technology,which is based on a summation mechanism:the overall reduction of the atmospheric concentration of greenhouse gases is equal to the sum of the countries effo
190、rts to reduce carbon emissions.The resulting perfect substitutability of climate protection measures among countries encourages free-rider behaviour,which in turn fuels the tendency of under-provision(Buchholz&Sandler,2021).At the same time,no country alone can fulfil this provision unilaterally.In
191、the absence of a regulatory authority,other means of supporting GPG provision may be at need realizing the welfare gains associated with it.This requires collective action also on the side of emerging economies and developing countries.MDBs have long been important partners for these countries and h
192、ave the financial means to support the necessary collective action.Therefore,in this study,we analyse the stand of current international regulation for relevant GPGs and the role that MDBs can play in a globally more efficient GPG provision.OPERATIONALISING GPGS FOR THIS STUDY In line with the frame
193、work raised by the World Bank,GPGs can thus be conceived of as an overarching concept that includes“commodities,resources,services-and also systems of rules or policy regimes with substantial cross-border externalities that are important for development and poverty reduction,and that can be produced
194、 in sufficient supply only through cooperation and collective action by developed and developing countries”.(World Bank,2007).It is the last point of this definition,in particular,that is of utmost relevance in a practical implementation of GPGs:the cross-border externalities of GPGs reduce the ince
195、ntives for individual countries to contribute to the GPG in addition to its own benefits,leading to an under-provision of the concerned good which,in turn,illustrates the need for collective support of their provision.The type of collective effort that is necessary for the provision of GPGs is at th
196、e same time closely linked to its aggregator technology.Against this background,we subsume the underprovision on the one hand,and the aggregator technology on the other hand under the underlying coordination problem of GPGs.Solving this coordination problem is of overarching importance to foster col
197、lective action among countries and,thus,achieve common goals.MDBs for GPGs|Final Report 9 Considering the aspects discussed above,a GPG as defined in this study has three interrelated characteristics.They generally produce substantial cross-country externalities.They are costly to provide.This inclu
198、des the opportunity costs of protecting them.They generate opportunities for improving welfare through collective action.These three characteristics determine whether we consider goods to be GPGs in this study.Thus,looking at the goods considered in academia,we subsume club goods,common goods and pu
199、blic goods that generally have significant cross-country externalities,i.e.,regional,or global,as GPGs(see Figure 2).Relying on a clear-cut GPG logic helps to differentiate GPGs from global challenges.Although being interconnected,the logic for addressing them might differ substantially.“Global chal
200、lenges”can be the result of negative externalities that are caused by the underprovision of GPGs.Furthermore,they certainly generate opportunities for improving welfare through collective action.Unlike for GPGs,tackling global challenges usually does not produce a significant amount of cross-country
201、 externalities,even if triggered by them.The support of adaptation to the underprovision of GPGs may be morally warranted but follows no specific GPG logic.FIGURE 1:DEFINING PROBLEM OF UNDERPROVISION IN GPGS Source:Oxford Economics MDBs for GPGs|Final Report 10 FIGURE 2:DEFINING AND COMPARING GOODS
202、Note:The categories considered in this study as GPGs are highlighted in blue.Source:Oxford Economics based on IMF(2021b)After laying the foundation for the study with this conceptual framework of GPGs,the next chapter will be dedicated to the GPGs that are specifically examined in the study.2.3.GPGS
203、 CONSIDERED IN THIS STUDY Although the identification of GPGs is unambiguous in theory,the separation of GPGs and non-GPGs becomes somewhat blurred when operationalising the concept.Thus,the selection of goods identified as being a GPG and part of this study is not exclusive and other goods could re
204、asonably be considered as well.Yet,a broad international consensus on the need for global action represents a pre-requisite for supporting the provision of GPGsespecially from the perspective of MDBs.In other words:“There should be an emerging consensus in the international community that global act
205、ion is required”(WB,2007,p.3).These global consensuses are not fixed but rather continuously evolving.The Covid-19 pandemic,for example,has put pandemic preparedness as a GPG at the centre of the global arena,whereas the financial crisis has changed the criteria and goals that the global community m
206、ainly agrees upon regarding the financial system.The assessment of the degree of possible welfare gains through collective action is eventually a political choice.Thus,Maurizio Carbone states:“Because policy choices determine what is and what is not a GPG,there cannot be a fixed list of such goods;s
207、ome always have the property of global publicness,while others have over time changed from being local or national to being global in terms of benefits and costs.”(Carbone,2007,p.183).MDBs for GPGs|Final Report 11 For simplicity and illustration,we will focus on seven GPG themes(see Figure 3)that wi
208、ll be used and referred to throughout the study for conceptual purposes.This does not imply that all of these must necessarily be addressed by MDBs or that there are no other GPGs that may be supported.Instead,this report uses these GPG themes to illustrate different characteristics of the respectiv
209、e GPGs that make them more or less fit to be incorporated into the work of the World Bank(and/or other MDBs).Which GPGs should be considered specifically by the World Bank,will then be discussed in Chapter 5.Of course,other GPGs such as creating and sharing knowledge relevant to development(World Ba
210、nk,2007;Kaul,Grunberg,&Stern,1999),freedom from poverty,equity and justice,the internet as infrastructure,as well as universal norms and principles(such as universal human rights)can also be seen as GPGs(Kaul,Grunberg,&Stern,1999).Still,this study represents a conceptual approach to GPGs and the ope
211、rationalisation of their provision that could be applied to other contexts as well.FIGURE 3:SEVEN GPG THEMES Source:Oxford Economics The selection of GPG themes is mainly in line with the priority GPGs identified by the International Task Force on Global Public Goods(2006)which was initiated by Fran
212、ce and Sweden to propose ways to improve their provision.The authors highlighted that for six GPGs the provision is critical.What our selection leaves out,is knowledge as another critical GPG according to the International Task Force on Global Public Goods(2006).Although it is arguably the most glob
213、al,most public,and most relevant for sustainable development,the generation and provision of knowledge for sustainable development goes probably beyond questions of multilateral financing and international regimes.Climate change mitigationPreservation of biodiversityPandemic preparednessPrevention o
214、f violent conflictsFree tradeInternational tax cooperationStable financial architecture1 2 3 4 5 6 7 MDBs for GPGs|Final Report 12 The selection of GPG themes also aligns with the GPGs discussed in the Report Global Public Goods:A Framework for the Role of the World Bank(WB,2007).Again,knowledge for
215、 development has been left out of the selection as it is more of a cross-cutting issue.Furthermore,the Banks GPG Protect the Environmental Commons is split into protecting biodiversity and climate change mitigation.Moreover,the definition of the GPGs analysed throughout this report is generally narr
216、ower,for example,prevention of violent conflict instead of achieving peace and security.Not considered as GPGs themselves are the effects or results of providing or not providing a good.Take migration for example.One might think to consider forced migration as a sub-theme to the prevention of violen
217、t conflict.Then again,migration is a consequence of not providing the GPG prevention of violent conflict.It could also be an effect of not providing other GPGs such as mitigating climate change or health.In the following paragraphs,we present a short and mostly intuitive explanation of why each GPG
218、theme considered here exhibits the three interrelated characteristics of a GPG in our definition.8 WHY EACH THEME IS A GPGA SHORT EXPLANATION Climate change mitigation:An intact climate is a core GPGcharacterised by high externalities that are global in reach.Neither individuals nor countries are pr
219、evented from sharing the benefits of clean air,the avoidance of global warming,or the preservation of the atmosphere.Hence,policies and actions that aim to curb climate change produce significant cross-country externalities.Each ton of greenhouse gas(GHG)emissions not emitted will benefit people acr
220、oss the globe.These reductions limit the atmospheric concentration of GHGs worldwide and,thus,contribute to the mitigation of climate change.However,these key features also result in a dilemma.As a consequence of the cross-country externalities,the individual and country-related incentives to contri
221、bute to the mitigation of climate change are low,resulting in free-ridinganticipating that other countries will invest in mitigation efforts.In light of this,there is a need for urgent concerted action to reduce emissions and incentivise countries to contribute to the mitigation of climate change.No
222、tably,adaptation to climate change is not considered a GPG.Although crucial for countries to increase climate change resilience,it does not meet the GPG criteria outlined above.However,adaptation needs to climate change can be conceived as the result of the negative externalities affecting an indivi
223、dual country.The recently launched Global Shield against climate risks accounts for exactly these externalities thrust upon countries.8 Please note that throughout the report this clear differentiation between the GPGs may differ depending on the type and context of the analysis concerned.MDBs for G
224、PGs|Final Report 13 Preservation of biodiversity:Biodiversity represents a second important GPG.It is defined as“the variety of life on Earth and the natural patterns it forms.Biodiversity provides a large number of goods and services that sustain our lives.”(Convention on Biological Diversity,2009)
225、.Biodiversity includes the“variability among living organisms from all sources including terrestrial,marine,and other aquatic ecosystems and the ecological complexes of which they are part;this includes diversity within species,between species and of ecosystems(Secretariat of the Convention on Biolo
226、gical Diversity,2005,p.5).We will thus use the terms biodiversity and ecosystems interchangeably in this report.The goods and services provided by the GPG biodiversity and ecosystems include material(such as food),environmental functions(such as flood control and nutrient cycling),and recreational b
227、enefits.Furthermore,biodiversity preserves substances that might be valuable for pharmaceutical purposes,potentially not yet discovered.It also positively impacts agriculture through pollination and contributes to carbon storage.Furthermore,biodiversity can provide resilience to environmental change
228、(Rands,et al.,2010).These benefits,and in turn policies that conserve biodiversity,offer significant positive externalities.At the same time,many of the benefits,such as flood control,nutrient cycling,pollination,or carbon storage,are non-rivalrous and non-excludable by nature.Similar to the case of
229、 climate change,these features imply that severe economic externalities exist.Individual rationality can thus result in the over-exploitation of biological resources and under-investment in conservation efforts from a global,collective standpoint.In addition,there exist interaction effects with clim
230、ate change:shifting climates may destroy habitation zones of species,further straining biodiversity.Coordinated actions at a global level are needed to maintain the biodiversity of our planet.Pandemic preparedness:In an ideal world,the export of communicable diseases would be prohibited or disincent
231、ivised by a supranational institution.Yet,as this is practically impossible,pandemic preparedness can be increased to mitigate the spread of diseases and potentially further negative consequences,such as people dying and suffering,economic lockdowns or travel restrictions.Especially,in an increasing
232、ly interconnected,globalised world with cross-border trade and movement of people,the spread of communicable diseases and other health-related risks cannot be contained within country borders.Thus,public health interventions such as national surveillance systems and vaccine-based immunisation effort
233、s have positive global externalities whose effects transcend far beyond national and regional boundaries.However,the success of an eradication programme,for instance,is contingent on the weakest link worldwide.Hence,international coordination of pandemic preparedness is crucial to combat free-riding
234、 and under-provision.Thus,preventing the further spread of existing(or new)communicable diseases via measures for pandemic preparedness is essentially a GPG.Prevention of violent conflict:The prevention of violent conflict constitutes another GPG realm.Wars,inter-and intra-state conflicts,as well as
235、 other types of fragility and violence risk posing a multitude of negative cross-border externalities that reach far beyond their original MDBs for GPGs|Final Report 14 area of occurrence.These include the destabilisation and devastation of(neighbouring)regions;escalation across borders;dislocation
236、of inhabitants;and disruption of trade and political relationships.In turn,the prevention of violent conflict represents a GPG.However,this GPG is associated with several uncertainties,such as the necessary assumption that in the absence of prevention,a violent conflict would have occurred,for examp
237、le.Moreover,the line between the prevention of violent conflict and its postponement may be blurred as well.Additionally,the impact of the externalities exhibited from the prevention differs vastly depending on the precise context of the conflict that would have erupted without the prevention:while
238、some violent disputes and their impacts are concentrated on the involved areas,others impose significant negative externalities across the globe.Further,in an increasingly globalised and interdependent world,characterised by advanced warfare technologies such as nuclear weapons,the individual as wel
239、l as the collective rationale of security can only be provided through international cooperation.Albeit being rational from a domestic perspective to ensure individual security through military strength,unilateral defections from traditional security treaties or international institutions jeopardise
240、 the international balance of power,potentially leading to severe global threats.The consequences of a non-provision of this GPG are extensive.The loss of lives,forced migration,disruptions of global value chains(GCVs),and an increased regional(economic)insecurity illustrate the extensive negative c
241、onsequences that non-cooperation and freeriding pose globally.As a prerequisite for global coordination,political stability as well as environmental,poverty,and health-related goals,preventing violent conflicts also has an overarching function for different GPGs.Free trade:Trade protectionism is a c
242、lassic example of a policy to maximise national interests at the cost of other countries.This can result in trade wars,where countries indulge in a spiral of installing reciprocal trade barriers,in most cases in the form of tariffs.While it is disputed whether raising import tariffs(up to a certain
243、point)is really to the advantage of the national economy,it is at least often conceived as such and advocated for by the respective interest groups.However,it is undisputed that raising import tariffs is to the disadvantage of trading partners.Thus,trade wars and in their milder form protectionism a
244、re characteristic examples of prisoners dilemma situations.Ensuring a level playing field in trade does not only confine to tariffs,however.Competition policies,anti-dumping,subsidies,intellectual property rights protection,and health standards have been regulated by the cooperating countries in the
245、 World Trade Organization(WTO)to inhibit a global race to the bottom.Also,the role of trade as a means to other goals(or even as an impediment to their realisation)has been recognised and is taking up increasing room in international discussions about global trade.While these are important discussio
246、ns,we limit the analysis of trade as a GPG to those of its characteristics that intrinsically mirror GPG characteristics themselves,namely ensuring equitable(and reciprocal)access to global markets.MDBs for GPGs|Final Report 15 International tax cooperation:A global race to the bottom can also be ob
247、served in corporate taxation and that of wealthy individuals,both of which are mobile to shift their tax bases to wherever the tax rates are lowest without altering their economic activities.This is especially true if these shifts occur without the country from which the capital is shifted knowing t
248、he respective wealth holdings.The countries that attract capital in that way gain at the expense of other countries.Thus,cooperating in tax matters,and surrendering this advantage is a clear case of a GPG.Stable financial architecture:Todays financial system is characterised by increasingly intercon
249、nected banking activities,securities trading,and exchange rate markets around the world.Although this is a fundamentally beneficial feature of the financial system because it ensures an efficient allocation of scarce capital around the world,its complex interdependence can cause domestic financial c
250、rises to trigger sharp shifts in capital flows with potentially contagious effects across borders.Past financial crises have repeatedly shown that they often generate high costs in economies far away from the economy that was initially involved.The spread of economic instability due to financial con
251、tagion leads to economic recessions and other disastrous outcomes that affect individuals,firms,and polities.This ability of financial markets to create systemic effects,which are difficult to contain locally,makes financial stability a GPG.The adoption of banking supervision or sound accounting pra
252、ctices in one economy,for instance,reduces the risk of instabilities and contagion far beyond its area of implementation.These effects are non-rival and non-excludable in consumption.However,country-specific incentives to improve stability-enhancing precautions are low because relative levels of der
253、egulation attract capital and because excessive financial volatility leading to crises is not fully reflected by price mechanisms.Without concerted international action,these features lead to an underprovision in the level of financial stability that is necessary for prosperity and political stabili
254、ty worldwide.Financial systems and trade can also function as intermediate GPGs to achieve the end of other GPGs,through their steering functions.All GPGs covered in this report require financing for an efficient provision.We will accordingly discuss this role in the discussions on the respective fi
255、nal GPGs but concentrate on the intrinsic GPG of financial stability when discussing this as a final GPG on its own.The following subsection lays out the interrelations between the different GPGs in more detail.WHY CONSIDERING GPGS TOGETHER IS IMPORTANTINTERDEPENDENCIES BETWEEN THE GPGS The GPGs out
256、lined in the last section cannot be perfectly separated.On the contrary,there are interdependencies between the different GPG themes.For example,failing to provide the GPG prevention of violent conflicts will have adverse effects on basically all other GPGs.Conflict and war,for example,harm the envi
257、ronment and the mitigation of climate change by ousting the topic from the public and political agenda as well as through increased GHG emissions and the damaging of habitats such as forests,oceans,or freshwaters.Furthermore,the destruction of biodiversity can negatively affect pandemic preparedness
258、 as diseases are more MDBs for GPGs|Final Report 16 likely to occur and spread if animal habitats are destroyed.At the same time,the systems ability to deal with these challenges could be reduced due to physical damages or an increase in patients with injuries,for example.Table 1 displays possible i
259、nterdependencies between the GPGs.Notably,the synergies work the other way around as well.Unmitigated climate change is likely to increase the risk of violence and conflict due to social unrest following the rise in sea levels and its associated homelessness of people,increased food insecurity,and u
260、nemployment for example.The outbreak of a disease or decreasing health conditions overall may also lead to social unrest and potentially negative impacts on the prevention of violence and conflict.Of course,these chains of effects are never certain and are likely to vary depending on the context.Mor
261、eover,they can also be conflictingfor example if free trade increases GHG emissions.MDBs for GPGs|Final Report TABLE 1:POTENTIAL INTERDEPENDENCIES BETWEEN THE GPG THEMES Global Public Goods Climate change mitigation Preservation of biodiversity Pandemic preparedness Prevention of violent conflict Fr
262、ee trade International tax cooperation Stable financial architecture Climate change mitigation-Supporting natural GHG reservoirs(e.g.,increased forestation or decreased deforestation)helps biodiversity preservation.Replacing fossil fuel-based energy sources with renewables reduces air pollution.Cons
263、equently,public health improves,which in turn potentially enhances a countrys resilience to pandemics.Increasing temperatures and more frequent and severe disasters can undermine peace and increase levels of violent conflict,for example,by inducing migration flows or amplifying food insecurity.Inter
264、national“green”investments and trade of“green”technologies can increase international trade.Natural disasters put stress on financial architecture.Thus,climate change mitigation may help to mitigate that risk as well.Preservation of biodiversity Protecting natural habitats often leads to an increase
265、 in GHG reservoirs.-Maintaining biodiversity might positively impact pandemic preparedness as ecosystems are crucial for medicine and vaccine development New pandemics are often zoonotic.Preserving the environment largely reduces the probability of new pandemics.Preserving biodiversity can support t
266、he prevention of violent conflict by ensuring the sustained availability of natural resources that often base the livelihoods of the population in conflict-affected regions.The preservation of biodiversity may impact trade by supporting a relative increase(decrease)of(un-)sustainable products traded
267、.Pandemic preparedness Increasing pandemic preparedness may also protect local habitats and biodiversity from foreign bacteria and-Increasing pandemic preparedness may support crisis resilience making Pandemic preparedness makes trade disruptions and restrictions due to health concerns Pandemic prep
268、aredness supports a stable financial architecture by MDBs for GPGs|Final Report 18 Global Public Goods Climate change mitigation Preservation of biodiversity Pandemic preparedness Prevention of violent conflict Free trade International tax cooperation Stable financial architecture viruses.violent co
269、nflict less likely.less likely.making economic downturns and government debt surges less likely.Prevention of violent conflict As wars have a negative impact on CO2 emissions the prevention of violent conflict helps to prevent an increase in emissions.As wars often go along with the destruction of l
270、and and the local environment,the prevention of violent conflict helps to protect and preserve biodiversity.Collapsing sanitary systems and stressed medical infrastructure could decrease a countrys resilience and pandemic preparedness.-Violent conflicts might impact(disrupt)global supply chains and
271、the architecture of trade relations.International tax cooperation requires a high degree of cooperation which is less likely in a situation of violent conflict.The prevention of a violent conflict may therefore be a first step towards enabling international tax cooperation.Violent conflicts might de
272、stabilise the international financial system,for example,due to sanctions Military and reconstruction costs put stress on public budgets possibly destabilising the financial system.Free trade Reducing trade barriers makes foreign“green”investments and the export of“green”technologies easier.Trade co
273、uld harm the climate due to transport emissions.Facilitating trade can prevent the exploitation of important habitats,as trade creates opportunities to acquire goods at the places where they can be produced without destructing the environment.Reducing trade barriers might facilitate more investments
274、 in pandemic preparedness Trade could influence pandemic preparedness badly because the increased mobility of goods and people accelerate the spread of diseases.Financial resources that are increased due to trade may open up opportunities for de-escalation,for example by investing in peacebuilding s
275、trategies.-The removal of trade barriers increases the demand for international tax cooperation,as extensive trade increases the incentive to monitor and enforce taxes that occur in the context of trading.Increasing international trade increase global dependence.This makes the financial architecture
276、“more global”leading to increased damage if a crisis occurs.MDBs for GPGs|Final Report 19 Global Public Goods Climate change mitigation Preservation of biodiversity Pandemic preparedness Prevention of violent conflict Free trade International tax cooperation Stable financial architecture Internation
277、al tax cooperation Comprehensive international tax cooperation is particularly important in the context of climate-related taxes.Only if those taxes are being enforced comprehensively,they achieve the desired effects on GHG emission reduction.-Improved international tax cooperation contributes to a
278、stable financial architecture,as monitoring tax havens could point to destabilising behaviour by individuals/firms/countries.Stable financial architecture Decarbonising economies require“green“investments and financial support.A stable financial architecture increases the willingness of internationa
279、l investors to make“green“investments.Increasing stable financial architecture might make pandemic preparedness investments more attractive internationally.A stable financial architecture with higher transparency requirements makes it more difficult to launder money or hide terrorism or war financin
280、g.A stable financial architecture might increase the pressure on tax havens(due to higher transparency).The same is true for speculation against currencies.-Note:Read the table from the row(cause)to column(effect)as follows:Climate change initiatives supporting natural GHG reservoirs(e.g.,increased
281、forestation or decreased deforestation)support the preservation of biodiversity.Source:Oxford Economics MDBs for GPGs|Final Report 2.4.SUSTAINABLE DEVELOPMENT GOALS AND GPGS The thematic synergies between the GPGs illustrated even expand to the relationship between GPGs and the Sustainable Developme
282、nt Goals(SDGs).The SDGs set by the United Nations General Assembly(UNGA)in September 2015 as part of the 2030 Agenda for Sustainable Development are the follow-up to the Millennium Development Goals(MDGs)that guided international development efforts from 2000 to 2015.The MDGs were rooted in conventi
283、onal ideas of development aid,focusing on the most vulnerable with a clear sharing of responsibilities:the Global North provides funding for the Global South.In contrast,the SDGs expand on the MDGs to embody a more holistic view of development cooperation.They include targets and responsibilities co
284、vering both the Global North and South and encourage both regions to cooperate within each region to reach their goals.In general,the SDGs incorporate ideas from the GPG agenda(Jenks,2015),especially in the climate context(Evans&Steven,2012).Since the goals were made more actionable in 2017 by a res
285、olution passed by the UNGA,they incorporate 169 targets with progress measured by 232 indicators.For example,the first goal of no poverty is divided into five“Outcome”goals,such as“By 2030,eradicate extreme poverty for all people everywhere,currently measured as people living on less than$1.25 a day
286、”,and two“Means of Implementation”(MoI)goals,such as“Create sound policy frameworks at the national,regional and international levels,based on pro-poor and gender-sensitive development strategies,to support accelerated investment in poverty eradication actions”.Importantly,the SDGs are not binding l
287、egal rules,but political goals set in the normative environment of international law therefore considered“soft law”(Kim,2016).As a“plan of action”(2030 Agenda),they are meant to shape the conversation around development and set measurable goals to encourage countries to act and implement national po
288、licies.Having a unified set of indicators improves cross-country comparisons and provides a tool for governmental and non-governmental actors to exert pressure on nations they see as lagging in the implementation of goals(Edwards&Romero,2014).The universal framing combined with quantifiable metrics
289、can motivate private actors to work toward progress(Fleming,Wise,Hansen,&Sams,2017).Furthermore,the goals focus the efforts of development banks and other international organisations on certain areas with clear indicators to evaluate success.Nevertheless,many of the MoI goals are criticised for bein
290、g inconsistent and relying on subjective indicators,reducing the use of certain subsets of the SDGs(Bartram,Brocklehurst,Bradley,Muller,&Evans,2018).In Table 2,we map selected SDGs to the seven GPGs defined above.While not all SDGs can be assigned to a specific GPG,most SDGs are aligned with one or
291、multiple specific GPG goals.Therefore,pursuing the SDGs goes hand in hand with an increase in the provision of GPGs in many cases and vice versa.The GPGs of climate change mitigation,the preservation of biodiversity,pandemic preparedness,and prevention of violent conflict correspond most MDBs for GP
292、Gs|Final Report 21 directly to several of the SDGs,further supporting the importance of externalities effects in these areas.For the other GPGs,fewer SDGs map as closely.TABLE 2:SDG AND GPG MAPPING GPGs SDGs Connection UN SDGs to GPGs Climate change mitigation Local benefits:Access to and the afford
293、able provision of energy supports national development;clean energy production reduces pollution supporting health and well-being Cross-country benefits:Clean energy helps mitigate climate change,especially by avoiding the locking-in to carbon-intensive energy sources Local benefits:Building sustain
294、able cities and communities creates national benefits such as clean water and clean air Cross-country benefits:Increasing sustainability may help mitigate climate change(for example,by providing renewable energy sources to households)Local benefits:Climate action reduces the disaster risk;raising ca
295、pacity and transforming into a low-carbon economy may create new job and market opportunities;investing in renewable energy could reduce international dependencies and energy costs in the long-term;climate action often has positive effects on the health of the local population well as animals and pl
296、ants(for example through reduced pollution)Cross-country benefits:Climate change mitigation Preservation of biodiversity Local benefits:Responsible consumption and production could benefit the local population by ensuring the sustainable management and efficient use of natural resources and reducing
297、 waste;facilitating research and innovation supports the economy and creates local job market opportunities Cross-country benefits:Using and developing products,processes,and services that reduce the impact on the environment,for example by finding global solutions to food waste and chemical disposa
298、l Local benefits:Preserving marine biodiversity could benefit the local population by improving the long-term food security and the local economy of coastal areas Cross-country benefits:Preventing unsustainable fishing practises spills over to other countries as well;Furthermore,it supports the pres
299、ervation of biodiversity.Local benefits:Preserving terrestrial biodiversity by protecting habitats may support long-term food security and the local economy Cross-country benefits:Ending trafficking of endangered species and protecting biodiversity sustains biodiversity.Pandemic preparedness Local b
300、enefits:Good health and well-being improved life quality of the local population directly Cross-country benefits:Benefits from health research spills over to other countries as well(for example,vaccine development);improved pandemic preparedness Local benefits:Clean water and sanitation helps diseas
301、e prevention and increase well-being and health through improved hygiene;increased food security and nutrition levels through save drinking water Cross-country benefits:Increased pandemic preparedness a reduced risk of the spread of communicable diseases MDBs for GPGs|Final Report 22 GPGs SDGs Conne
302、ction UN SDGs to GPGs Prevention of violent conflict Local benefits:Peace and security increase the well-being and health of the local population directly Cross-country benefits:Reducing the risk of violence and conflict in specific countries also reduces the risk of consequential externalities affe
303、cting other countries,for example,supply chain disruptions or refugee flows Free trade Local benefits:Eradication of poverty lifts living standards,well-being,and health of the local population Cross-country benefits:Free trade can help to eradicate poverty by increasing economic activity and theref
304、ore income as well as the fiscal resources of the government Local benefits:Global trade regulations may help to end modern slavery and child labour as well as prevent bad working conditions;trade also enables growth by reducing trade barriers Cross-country benefits:Free trade can support economic g
305、rowth and trade regulations may help to improve working conditions globally Local benefits:Infrastructure,innovation,and industry support the local economy leading to increasing living standards and well-being Cross-country benefits:Funding infrastructure helps enable international trade supporting
306、economies across the globe;the innovation of improved products,goods,and services spills over to other countries as well International tax cooperation Local benefits:Improved international tax cooperation can help to reduce inequality nationally by mitigating a race to the bottom for taxes and by en
307、suring sufficient domestic tax revenues.Cross-country benefits:International tax cooperation prevents a race to the bottom for taxes across countries as well.Thus,global inequality is reduced.Stable financial architecture Local benefits:Improved regulation and monitoring of global financial markets
308、and institutions can help to prevent domestic inequality and support the local community,for example,if natural disasters occur Cross-country benefits:A stabilised financial architecture may help to reduce inequalities by preventing financial crises that tend to amplify existing inequalities Notes:T
309、he table presents exemplary synergies between the SDG and the provision of GPGs.It does not aim to be complete.Source:Oxford Economics based on UN Agenda 2030(2015)and Naert(2021)Unfortunately,the SDGs suffer from similar problems as the GPGs and can,therefore,not be used to rectify the accountabili
310、ty issues(Naert,2021)and resulting free-rider problems associated with GPGs(Wouters&Cogolati,2015).As reaffirmed in the UN resolution,the SDGs do not restrict countries sovereignty,so no mechanism sanctioning governments that do not take sufficient steps exists(Easterly,2015).Furthermore,the need fo
311、r each member to craft a national implementation strategy hinders the institutionalised cross-country cooperation envisaged by the GPG ideal.Additionally,having many independent goals might prevent the implementation of synergies meant to be encouraged by the wide definition of the GPG groups(Griggs
312、,et al.,2014;Pegram,2014).The revision and expansion of the MDGs attracted criticism from the least developed nations that fear losing priority as too many goals hinder the prioritisation of the most vulnerable(Bali Swain,2018)and additional responsibilitiesespecially in the climate areaburden weak
313、MDBs for GPGs|Final Report 23 states further.Middle-income countries(MICs)resent losing access to unconditional aid and question the additional restrictions on their development imposed by the unavoidable trade-off between industrialisation and sustainability(Jenks,2015;Spaiser,Ranganathan,Bali Swai
314、n,&Sumpter,2017).This again supports the finding that GPG financing in developing countries has to consider factors other than mere subsidies for externalities.In conclusion,it is rather unlikely that any SDG can be achieved by one country alone,or even on a country-by-country basis.The complementar
315、ity of SDGs and GPGs is rooted in that GPG externalities reflect the global interconnectedness of countries,economies and societies which can mutually foster sustainable development(positive externalities)as well as hinder it(negative externalities).Both require global governance to overcome free ri
316、ding and incentivise collective action for the achievement of the SDGs.While SDGs operate on a within-country level,except for SDG 17“Partnerships for the goals”,with countries all encouraged to create their strategies to reach domestic goals,the GPG agenda is focused on cooperation between countrie
317、s.As SDGs impose the same responsibilities on each country,they are not conceptualised from the same efficiency perspective as GPGs which aim to reduce negative and promote positive externalities in the most efficient way possible.Nevertheless,the inclusion of goals that can be classified under the
318、GPG idea in the SDGs has a positive impact on its promotion in the development ecosystem,even though GPGs are stifled by their absence in the UN discourse around the 2030 Agenda.Although GPGs are to an important degree a precondition for supporting the SDG agenda,they can become conflicting at the o
319、perational level where budgets are usually fixed.Thus,where to spend the marginal dollar can cause SDGs and GPGs to become substitutes rather than complements.Overall,however,GPGs and SDGs are not conflicting objectives.This will be discussed further in Chapter 5.2.5.GPG-SPECIFIC SPENDINGAN ANALYSIS
320、 OF ODA FLOWS The awareness concerning the importance of GPGs,and their provision has increased in recent years.To analyse whether the perception of the growing importance of the topic is matched by reality,this chapter explores the development of the Official Development Assistance(ODA)flows betwee
321、n 2011 and 2019.The aim is to yield insights into the relative importance of the individual GPGs as measured by their funding development and identify key donors as well as key recipients by GPG type.This analysis also provides information that will be compared to the theoretical foundations develop
322、ed at later stages in the study.For example,regarding whether the distribution of funding across GPGs reflects their externalities.Measuring international disbursements on the provision of GPG is not trivial.The Creditor Reporting System(CRS)provided by the OECD has been used to approximate internat
323、ional flows towards GPG provision in the literature.9 It summarises data on official development 9 See,for example,Development Initiatives(2016),Cepparulo and Giuriato(2016),Evans and Davies(2015),Velde et a.(2002)or Mitchell et al.(2021).MDBs for GPGs|Final Report 24 assistance(ODA)which is defined
324、 as“government aid that promotes and specifically targets the economic development and welfare of developing countries”(OECD,2022a).It is considered the“gold standard”of foreign aid and the main source of financing for development aid(OECD,2022a).10 To analyse GPG-specific ODA spending,the full arra
325、y of detail of the ODA data are used.Flows can be differentiated by donor,sector,flow,channel,type of flow,and type of aid.Matching the provided sectors and GPGs(see matching displayed in Table 25 and some examples in Box 2)yields us a dataset containing information on international aid flows direct
326、ed to the provision of GPGs.Although the matching of sectors and GPGs is inspired by Development Initiatives(2016)it has been slightly altered by adding some ODA sectors as highlighted in Table 25 in the appendix.To approximate GPG funding as precisely as possible,gross disbursements are used for th
327、e analysis.The results of the subsequent analysis are presented in this section.Notably,the classification of GPGs in this analysis slightly differs from the one generally used and displayed in Figure 3 as the definition of GPGs has evolved.In contrast to the rest of the report,the GPGs climate chan
328、ge mitigation and preservation of biodiversity are covered by climate and environment.Furthermore,pandemic preparedness is extended to global public health and the prevention of violent conflict for peace and security.Free trade and international tax cooperation are summarised under the Fair interna
329、tional trade system.Stable financial architecture remains the same.Donors of development assistance can be classified into four groups.While the first three groups can be classified as Official Development Assistance(ODA)the fourth group represents private donors:1)ODA is provided by countries that
330、are members of the Development Assistance Committee(in the following referred to as DAC countries);2)Multilaterals,3)and countries that are not a member of the Development Assistance Committee(in the following referred to as non-DAC countries);4)Private donors,such as the Bill&Melinda Gates Foundati
331、on and the Bezos Earth Fund,for example.11 Overall,ODA(including Private Development Finance)increased by almost 37%between 2011 and 2019.GPG-specific ODA increased by more than 54%during the same period leading to an increase in the average share of GPG-specific ODA from 14%in 2011 to 15%or US$31.6
332、 billion in 2019.This contrasts with their growing importance and calls for more action.10 For more information on the CRS data provided by the OECD,see Development finance standards-OECD or access the data via:Creditor Reporting System(CRS)(oecd.org).11 However,these donations are labelled as Priva
333、te Development Finance(not ODA)which should be considered when comparing the results of the individual groups.MDBs for GPGs|Final Report 25 BOX 2:EXAMPLES FOR SECTORS PER GPG CATEGORY Although the full matching of ODA sectors to GPGs can be found in Table 25 in the appendix,here are some examples of which sectors fall into the GPG categories:Climate and environment:Water resources conservation(inc