Session 2 Managing the global commons: The logic of international cooperation and the problem of the free-rider

What is private, what is public? First distinction by Jean-Baptiste SAY: free goods vs economics goods Private goods are rival and excludable in consumption > suitable for market transaction Club goods are excludable but non-rivalrous Public goods are non-rival and non-excludable in consumption > unsuitable for market transaction? Market failures? => Does that mean that the provision of private goods is regulated by the market, and the provision of public goods by the state?

Global public goods Public goods ‘whose benefits cut across several countries and generations’ (Kaul) Traditional GPGs, governed by international agreements New GPGs, requiring concerted policy-making Concern about publicness of benefits Concerns about publicness of decision-making Use of the sky or oceans vs protection of ozone layer

Critiques of the definition Pure public goods are almost impossible to find Whether a good is private or public is a matter of public policy. Are some goods intrinsically private or public? Public utility may vary States are not the only providers of public goods Suggestions to shift the definition towards: Inclusiveness: active category, socially constructed Public provision, participatory decision-making Fairness and justice, public benefits

The logic of collective action Why do states cooperate?

Assumptions States are self-interested Their interests are often conflicting There’s no central authority Cooperation, at the end of the day, is about mutual adjustments to national policies so that a common, desirable outcome can be reached. Model: Prisoner’s dilemma

Conditions for cooperation Basic conditions: Reliable information Reciprocity Mutual interest Need for monitoring: role of international organisations as facilitators

The tragedy of the commons Open-access gazing land over-exploited because of self interest and lack of constraints. The field as a metaphor for common goods: in the absence of regulation and/or property, common goods are overexploited.

The prisoner’s dilemma Self-interest is primary driver No interest incentive to cooperate on a one-shot basis Equilibrium can be reached only if the game is repeated (and preferences revealed : role of international institutions) B silent B talks A silent 6 months each A: 10 years B: freed A talks A: freed B: 10 years 5 years each

The problem of the free rider Inherent problem of cooperation How should each member contribute to the provision of the good? How much can each member benefit from the good? > Issue of compliance

How to define collective preferences from individual preferences? Collective preferences are not fixed They’re not always rationnal They’re not easy to identify and can be contested > The aggregation of individual preferences can lead to a detrimental collective outcome.