[Ip-health] James Love: The Use and Abuse of the Phrase “Global Public Good”

Thiru Balasubramaniam thiru at keionline.org
Thu Jul 9 22:42:25 PDT 2020


https://www.indiachinainstitute.org/2020/07/09/the-use-and-abuse-of-global-public-good/?fbclid=IwAR2GIJjcZoxE1zDnbbR3x9rAEi4AzjTNfyTQV3fUW29_eVLnFTRtW4brsrc


The Use and Abuse of the Phrase “Global Public Good”

by James Love
July 9th, 2020

A flawed understanding of the concept of “public good” hampers the fight
for equitable access to the upcoming COVID-19 vaccine

The term “global public good” has been used in very different ways by
policy makers, economists and others. The term “global” is not particularly
controversial, and in this context is generally understood to involve cases
where the benefits of the service or good impact residents of more than one
country, even if not necessarily the whole world. The term “public good” is
subject to more diverse uses, often depending upon one’s educational or
professional training.

For many people, perhaps most, the term “public good” is loosely defined to
include cases where governments are willing to undertake measures to expand
access, with universal access at least an aspirational goal. However, among
the other influential definitions of “public good” is one that is
exceptionally restrictive. A proposal by Paul Samuelson first published in
1954, meant at the time as an extreme and polar case, has found its way
into countless articles, textbooks and academic courses, and has parameters
that are rarely met in practice. At times, Samuelson’s 66-year-old paper is
actually an obstacle to collective efforts to supply and distribute goods
that have considerable impact on society.

The COVID-19 pandemic presents an astonishing global challenge regarding
the control of the pandemic and the reduction of harm. The health impacts
are large, particularly for older patients, and growing unpredictably, and
the pandemic has had an enormous social and economic impact on everyone,
with no obvious end in sight.

Biomedical technologies to combat the pandemic are important, particularly
diagnostic tests, drugs and vaccines, and the world needs innovation,
testing, evaluation, access and affordability. A number of political
leaders, health groups and other entities have called for COVID-19 vaccines
and drugs to be treated as public goods. For example, the South Centre
issued a statement on the launch of the World Health Organization’s
COVID-19 Technology Access Pool (C-TAP), noting that “aims at ensuring that
the technologies needed to address the pandemic are considered, as a matter
of principle, global public goods.” The MSF Access Campaign declared that
“COVID-19 medical tools should be considered “global public goods” and
should be ‘affordable, safe, effective, easily administered and universally
available for everyone, everywhere.’” The Secretary-General of the United
Nations, António Guterres, issued a statement on May 20, 2020, which said
that “African countries should also have quick, equal and affordable access
to any eventual vaccine and treatment, which must be considered as global
public goods.”

In the negotiations over a World Health Assembly (WHA) resolution on the
COVID-19 pandemic, the European Union submitted an “EU proposal for a
CONSOLIDATED zero draft on a WHA73: ‘Covid-19 Response.’” The draft
“Recognizes population-wide immunization against COVID-19 as a global
public good for health and the crucial role of quality, safe, and
efficacious vaccines therein.” The United States objected to the inclusion
of “public good” in the text, on grounds that it was not well-defined, and
proposed that global public good be changed to “global benefit.” There was
also a discussion in the drafting process about the distinction between
vaccination being a global public good, and the vaccines themselves. The
Third World Network reported that the Chair of the WHA drafting committee
on the resolution “clarified that it recognized that ‘population-wide
vaccination’ was a global public good for health but the vaccine itself was
not.”

The distinction between vaccination and the vaccine was based upon the
definition that Samuelson proposed more than six decades ago. The benefits
of a COVID-19 vaccination accrue not only to the person being vaccinated,
but also to the community, as widespread vaccination eliminates hosts for
the virus, and contributes to the control of the pandemic. In this sense,
the benefits of vaccination have an external benefit for the community, and
that benefit is non-excludable. But the vaccine itself, as a product, is
neither non-rival in consumption, nor non-excludable, the two key features
highlighted by Paul Samuelson in his original definition of public goods,
as set out in two papers in 1954 and 1955. If individuals cannot be
effectively excluded from the use of a good, it is non-excludable in
nature; if its use by one individual does not reduce availability for
others, the good is non-rival. While first proposed as an “extreme” or
“pure” case for public expenditures, the definition has become widely
quoted without an appreciation for its limits.

In the mid-1950s, the world was deeply engaged in a cold war between
governments that were extolling the virtues of either market or non-market
models for the production and distribution of goods. Samuelson was
interested in presenting a mathematical model where private markets would
not exist, as “an extreme polar case” that would be used to contrast “the
admittedly extreme polar case of traditional individualistic general
equilibrium.” The “grand Walrasian model of competitive equilibrium” was
the extreme polar case at which Samuelson was aiming, in which markets and
market prices were efficient, and in some simplified versions, perfectly
efficient.

Samuelson’s 1955 paper provides ample caveats regarding the relevance of
this model, which was illustrated by the examples of “an outdoor circus or
national defense” as two goods that were non-excludable and non-rival in
consumption. He acknowledges that “public expenditure and regulation
proceed from considerations other than those emphasized in my models,”
redistribution of incomes, paternalistic policies, where “atomistic
competition” is not realistic, and “Myriad ‘generalized economic and
diseconomy’ situations, where private pecuniary interest can be expected to
deviate from social interests.” Notably, in his 1955 paper, Samuelson
states “I regret using ‘the’ in the title of my earlier paper.” In a 1958
paper on “public expenditure theories,” Samuelson notes that a good that
“refuses to fall in my polar case for a pure public good will not thereby
obligingly go into the other polar case of a pure private good,” using the
example of an information good with a zero marginal cost to make his point.

The two characteristics Samuelson used in his “pure theory of public
expenditure” benefit from some reflection, since they capture such a small
subset of goods that governments actually spend money on. Goods that are
both (1) non-rival in consumption and (2) non-excludable exist, but are
rare.

The phrase “non-rival in consumption” eliminates drugs or vaccines as
products, as well as hospital beds, services of health care workers, and
much of what governments subsidize or directly provide. Knowledge is one
good that is often held out as an important good that is non-rival in
consumption, and in the context of COVID-19, this would include the
inventions, data and know-how to make diagnostic tests, drugs or vaccines,
as well knowledge gained by the evaluation of the efficacy and safety of
products.

For knowledge goods, non-excludability can be a hard condition to meet.
Some of the knowledge from the evaluation of the safety and efficacy of
products will also have a non-excludable quality, although recent
developments in regulatory policies on test data have made even that an
ownable and excludable asset in many jurisdictions.

Intellectual property is a term given to a growing set of rights, often
exclusive, that are granted to inventions, expressions, designs, data,
know-how and clinical evidence used for regulatory approvals. The primary
mission of laws governing intellectual property is to make knowledge goods
excludable—even when expressions are published, patented inventions
disclosed or data is cited by governments or published research, or through
various technical protection measures or secrecy, including restrictions on
worker mobility, and non-disclosure and non-compete agreements.

Samuelson anticipated and also reacted to criticism of his definition by
arguing that “in almost every one of the legitimate functions of government
that critics put forward there is to be found a blending of the extreme
antipodal models.” However, Samuelson also ventured that “any function of
the government not possessing any trace of the defined public good (and no
one of the related earlier described characteristics) ought to be carefully
scrutinized to see whether it is truly a legitimate function of government.”

In the context of COVID-19, Samuelson’s 1950s definition of a “pure” public
good is a poor fit, whereas everything about the development, manufacturing
and access to diagnostic tests, drugs or vaccines fits his broader
framework for public expenditures quite well.

There are certainly non-excludability aspects of both herd immunity and the
elimination of the colossal cost of the pandemic responses, as well as
robust non-rivalry in consumption characteristics of inventions, data,
know-how and knowledge from testing and evaluation of products. When you
include, as Samuelson did, “redistribution of incomes, paternalistic
policies, where ‘atomistic competition’ is not realistic, and “Myriad
‘generalized economic and diseconomy’ situations where private pecuniary
interest can be expected to deviate from social interests” then the case
for public expenditures is very strong for COVID-19 biomedical inventions.

In the case of COVID-19 policy makers and policy experts should refrain
from using Samuelson’s “extreme” case for a “pure” public good as one that
is both non-rival in consumption and non-excludable as the working
definition for global public good. This can be difficult, given the
attractive elegance of Samuelson’s “pure” case, and the need for authors to
acknowledge Samuelson’s influential earlier work. For example, consider the
struggles by contributors to Providing Global Public Goods, a publication
edited by Inge Kaul, et al, in 2003, to find ways to label all sorts of
obviously useful global interventions as “global public goods.”

For COVID-19, what does it mean to treat a biomedical innovation such as a
diagnostic test, drug or vaccine as a global public good? As a practical
matter, and in the context of this pandemic, it would mean, as proposed by
the Financial Times, that policies should facilitate a diversity of
manufacturers, and the open licensing of intellectual property rights for
drugs and vaccines effective against the virus, since the “world has an
overwhelming interest in ensuring these will be universally and cheaply
available.”

We fully expect that in the coming months governments with the most
resources will seek preferential access to new drugs or vaccines for the
virus, as they already have with regard to personal protective equipment
and therapeutics, and through advance purchase commitments with vaccine
manufacturers. The hoarding of scarce products is deplorable, but
predictable, and policymakers will at best moderate the hoarding. What is
completely indefensible is to hoard the intellectual property rights and
the know-how necessary to manufacture and ensure quality for an effective
therapeutic or vaccine. The non-rival nature of the knowledge necessary to
make a product is a compelling reason to treat this as a public good, even
though intellectual property rights and secrecy make it possible to be
exclusionary.

James Love is Director of Knowledge Ecology International. His work focuses
on the production, management and access to knowledge resources, as well as
aspects of competition policy.


-- 
Thiru Balasubramaniam
Geneva Representative
Knowledge Ecology International
41 22 791 6727
thiru at keionline.org


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