Economic Development Aids as a Financial Instrument of Global Public Goods: Performance Assessment for Donor Countries

Economic Development Aids as a Financial Instrument of Global Public Goods: Performance Assessment for Donor Countries

Hayriye Atik (Erciyes University, Turkey) and Fatma Ünlü (Erciyes University, Turkey)
Copyright: © 2019 |Pages: 22
DOI: 10.4018/978-1-5225-7564-1.ch013

Abstract

The importance of global public goods (GPGs) is increasing every day. As a result, the concept become an important part of international policymaking. There is a huge literature on the definition and classification of GPGs, as well as the financing problems of them. GPGs are generally financed through the development aids given by international organizations and some developed countries. Literature is generally concentrated on the determination of the amount of aids devoted to different categories of GPGs, such as environment, health, peace-keeping, and knowledge. Differently from the literature, a new and more general classification is also used in this chapter. The main sectors included in the analysis are social infrastructure and services, economic infrastructure and services, production sectors, multi-sector/gross cutting, and humanitarian aid. For the first time in the literature, principal components and cluster analysis methodologies were used to determine the performance of the countries providing official development aids in this study.
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The Definition Of Public Goods

Although the term public good is old in economic literature, the features of public goods were first used by Samuelson (1954). According to him, a pure public good should have two features which are non-rivalry in consumption and non-excludability. Non-rivalry means that the consumption of the public good by one person will not decrease its availability to the others. Non-excludability means that it is impossible to exclude anyone from the consumption of the public good. If these two features are completely satisfied, a public good is said to be pure (Kocks, 2005). Instead of defining the global public goods, Samuelson tried to define the features of public goods and also to determine the mix of private and public goods.

Key Terms in this Chapter

Non-Rivalrous: A good is considered non-rivalrous or non-rival if, for any level of production, the cost of providing it to a marginal (additional) individual is zero.

Regional Public Goods: Public goods with positive effects on some countries within a geographical region.

Common Goods: Are defined in economics as goods which are rivalrous and non-excludable.

DAC Countries: DAC countries were the US, Germany, Australia, Austria, Belgium, Denmark, Finland, France, The UK, Ireland, Spain, Sweden, Switzerland, Italy, Japan, Canada, Luxembourg, Norway, Portugal, New Zealand and Greece. Recently, Hungary, Slovak Republic, Poland, Iceland, Czech Republic, Slovenia, and Korea were included in the DAC group.

Global Public Good: GPGs are goods with benefits or costs that extend across countries and regions.

Club Goods: Public goods with benefits restricted to a specific group may be considered club goods. For example, expenditures that benefit all of the children in a household but not the adults.

Public Good: A public good is a good that is non-rival and non-excludable.

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