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Strategic Interaction Among Governments in the Provision of a Global Public Good

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  • Kyle, Margaret
  • Ridley, David
  • Zhang, Su
Abstract
How do governments respond to other governments when providing a global public good? Using data from 2007-2014 on medical research funding for infectious and parasitic diseases, we examine how governments and foundations in 41 countries respond to funding changes by the US government (which accounts for half of funding for these diseases). Because funding across governments might be positively correlated due to unobserved drivers they have in common, we use variation in the representation of research-intensive universities on US Congressional appropriations committees as an instrument for US funding. We find that a 10 percent increase in US government funding for a disease is associated with a 2 to 3 percent reduction in funding for that disease by another government in the following year.

Suggested Citation

  • Kyle, Margaret & Ridley, David & Zhang, Su, 2017. "Strategic Interaction Among Governments in the Provision of a Global Public Good," CEPR Discussion Papers 12419, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:12419
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    Cited by:

    1. Radulescu, Doina & Sulger, Philippe, 2022. "Interdependencies between countries in the provision of energy," Energy Economics, Elsevier, vol. 107(C).
    2. Paolo Pertile & Simona Gamba & Martin Forster, 2018. "Free-Riding in Pharmaceutical Price Regulation: Theory and Evidence," Discussion Papers 18/04, Department of Economics, University of York.
    3. Margaret K. Kyle, 2019. "The Alignment of Innovation Policy and Social Welfare: Evidence from Pharmaceuticals," NBER Chapters, in: Innovation Policy and the Economy, Volume 20, pages 95-123, National Bureau of Economic Research, Inc.
    4. Pierre-Richard Agénor & Luiz Awazu Pereira da Silva, 2023. "Global public goods, fiscal policy coordination, and welfare in the world economy," BIS Working Papers 1106, Bank for International Settlements.
    5. Kyle, Margaret K., 2022. "Incentives for pharmaceutical innovation: What’s working, what’s lacking," International Journal of Industrial Organization, Elsevier, vol. 84(C).
    6. Doina Maria Radulescu & Philippe Sulger, 2021. "Interdependencies Between Countries in the Provision of Energy," CESifo Working Paper Series 8896, CESifo.

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    More about this item

    Keywords

    Public goods; Free riding; Innovation; Health; Pharmaceuticals;
    All these keywords.

    JEL classification:

    • H4 - Public Economics - - Publicly Provided Goods
    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights

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