Prof. Dr. Inge Kaul
An interview with Prof. Dr. Inge Kaul; Former Director of UNDP's Office of Developmental Studies
04.02.10 Interview conducted by Jack Hood
In the wake of this global economic crisis, and the likely reconfiguring of the world’s financial and economic system, what role can the concept of Global Public Goods play? Has the crisis presented a golden opportunity for Global Public Goods to be more fully recognized and incorporated on the stage of world governance?
The financial architecture and financial markets have all along been a global public good because they are in the global public domain and they are affecting us all. The term ‘good’ has no value connotation, it just means the condition in the public domain. Many of us view public domain differently. You could say the Wall Street actors thought the old public good and public system was good in a value sense, but those of us who lost our savings did not. We need a change, more oversight, more rules and regulations of products. Every crisis unfortunately has high costs, and is spread unevenly, but the good side is that after all we can develop some preparedness to rethink the role of the financial sector in the economy and ask how do we design this financial architecture, so it helps the real economy.
How might a stronger emphasis on Global Public Goods affect the distribution of wealth among companies, nations and peoples?
Hazel Henderson and I worked on this issue together in 1995, and I must say I suffered a lot. Having put out this book, and it caused a storm of opposition, but I have changed a lot since this debate. I have slightly changed my mind because the original Tobin tax idea culminated in the 1970’s and had a state capacity when many countries were still weak. But now you see many states, like Brazil and Chile, are able to use their own corrective instruments when they come under pressure from financial actors. In this way you have a more nimble and tailored reaction, which is also more effective and efficient, but global taxation may have high costs that we don’t like. You see today the debate is changing and as Hazel also pointed out President Sarcozy is again coming back to the issue, not to dampen volatility, they know they can’t do that, but to fulfill the budget holes, it is now a resource mobilization instrument. Since we have such debt at the national level, we must expect foreign aid and money for international cooperation to come under pressure. I am now proposing that we should identify some systemic risks like climate change, and begin to put levies on currency transactions, but to collect this centrally, so that it doesn’t get lost it a national budget. But it would be targeting, because you cannot generate an automatic resource flow that would end up in the wrong hands
What are some cultural challenges in exporting the idea of a ‘global public good’ to the world?
The cultural challenge is in language. And in making sure we all understand the same thing. It starts with global because most people look up and don’t understand it as spans across countries and continents. Russia and former states of the Soviet Union think that we are crazy, because we have the idea of collective good. The term ‘good’ is being misunderstood as good for all. The same happens with the term ‘global governance’. We must make it a goal to better understand each other because a lot of international fighting comes from miscommunication.