Global goods in the structure of public purpose goods

Нanna Pylypenko
Doctor of Economics, Professor, Enterprise Economics Department, SHEI «National Mining University», Ukraine, e-mail: annapylyp@ukr.net, ORCID ID: https://orcid.org/0000-0003-2091-4320

Vadym Horbanov
Postgraduate Student, Enterprise Economics Department, SHEI «National Mining University», Ukraine, e-mail: horbanyov@gmail.com, ORCID ID: https://orcid.org/0000-0001-8793-564X

Cite this article:

Pylypenko, H., Horbanov, V. (2018). Global goods in the structure of public purpose goods. Ed.: M. Zveryakov (ed.-in-ch.) and others [Hlobalni blaha u strukturi blah suspilnoho pryznachennia; za red.: М. I. Zveriakova (gol. red.) ta in.], Socio-economic research bulletin; Vìsnik socìal’no-ekonomìčnih doslìdžen’ (ISSN 2313-4569), Odessa National Economic University, Odessa, No. 2 (66), pp. 19‒28.

Abstract

The reasons for the existence of the public goods phenomenon are examined and the universal criteria for their classification are defined in the article. The contradiction between private and public interests, as well as the conflict of explicit and implicit needs are considered as the root causes of existence of classical public goods. It is proved that the objective consequence of these contradictions is the indifference of private business to public goods provision to the society, since the basic characteristics of public goods (non-excludability from consumption and non-rivalry) reduce private benefits in their production. Arguments in favor of the existence of global public goods are given, their place in the system of production of non-market goods is identified. The contradictions in the production of global public goods are highlighted; they include low profitability and high costs for ensuring conditions of «marketability», the absence of an effective regulator in the international arena, whose decisions would be binding for execution, the evasion of public goods consumer from payment for the intake. It is shown that the essential characteristics of the global public goods phenomenon and therefore the contradictions of their production are generated by social relations, which are manifested in the conflict between private, national and global interests. Creation of an effective model for the public goods production is carried out through the formation of a public mechanism for coordinating economic interests in the international space. The existing mechanism for the provision of global public goods, implemented through the activities of international organizations, generates the collective choice problem. It is proposed to solve this problem through the creation of supranational regulatory bodies that will take care of the regulation of those fields of activity that are the most sensitive in terms of the interdependence of economies of different countries.

Keywords

public goods; global public goods; classification criteria of public goods; conflict between private and public interests in the public goods provision; explicit and implicit needs.

JEL classification: Н410; DOI: https://doi.org/10.33987/vsed.2(66).2018.19-28

UD classification: 330.544.2

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