GPGs and Where to Fund Them: The Startling Implications of Financing Global Public Good Provision for the Multilateral Development Banks

Increasing pressure is being placed upon the multilateral development banks (MDBs) to expand and restructure their operations in response to changing global needs. Specifically, influential commentators, shareholders, and senior managers in the MDBs themselves have argued that they need to ‘do more’ in order to address underprovision of important global public goods. In doing so, most have asserted that there is no trade-off between this expanded mission and the existing core mandate of much of the MDB system, the economic development of poor countries and eradication of poverty within their borders. This paper argues that public and policy discourse has been imprecise in its definition of what constitutes a global public good, with implications for our understanding of how MDBs contribute to them. Once this is corrected for, it becomes apparent that, except under restrictive conditions that are unlikely to hold in the real world, such trade-offs between objectives are unavoidable, though they may differ in severity. Ultimately, these trade-offs make it impossible to pursue the provision of goods that contribute to global public goods, core development objectives, and value-for-money in spending at once. It concludes by proposing the outlines of a more modest, but achievable GPGs agenda which does not come at the expense of development objectives.