Funding global public goods: the dark side of multilateralism

Patrick Bayer, Johannes Urpelainen

Research output: Contribution to journalArticle

4 Citations (Scopus)
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Abstract

The funding of global public goods, such as climate mitigation, presents a complex strategic problem. Potential recipients demand side payments for implementing projects that furnish global public goods, and donors can cooperate to provide the funding. We offer a game-theoretic analysis of this problem. In our model, a recipient demands project funding. Donors can form a multilateral program to jointly fund the project. If no program is formed, bilateral funding remains a possibility. We find that donors rely on multilateralism if their preferences are relatively symmetric and domestic political constraints on funding are lax. In this case, the recipient secures large rents from project implementation. Thus, even donors with strong interests in global public good provision have incentives to oppose institutional arrangements that promote multilateral funding. These incentives have played an important role in multilateral negotiations on climate finance, especially in Cancun (2010) and Durban (2011).

Original languageEnglish
Pages (from-to)160-189
Number of pages30
JournalReview of Policy Research
Volume30
Issue number2
DOIs
Publication statusPublished - 31 Mar 2013

Keywords

  • climate finance
  • global public goods
  • international governance
  • multilateralism

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