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Strategic interaction among governments in the provision of a global public good

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  • Margaret Kyle

    (CERNA i3 - Centre d'économie industrielle i3 - Mines Paris - PSL (École nationale supérieure des mines de Paris) - PSL - Université Paris Sciences et Lettres - I3 - Institut interdisciplinaire de l’innovation - CNRS - Centre National de la Recherche Scientifique)

  • David Ridley

    (CEE - Department of Civil and Environmental Engineering [Cambridge] - MIT - Massachusetts Institute of Technology)

  • Su Zhang

    (School of Biomedical Engineering and Med-X Research Institute - Shanghai Jiao Tong University [Shanghai])

Abstract

How do governments respond to other governments when providing a global public good? Using data from 2007 to 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 % increase in US government funding for a disease is associated with a 2 to 3 % reduction in funding for that disease by another government in the following year.
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Suggested Citation

  • Margaret Kyle & David Ridley & Su Zhang, 2017. "Strategic interaction among governments in the provision of a global public good," Post-Print hal-01952672, HAL.
    • Handle: RePEc:hal:journl:hal-01952672
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    Cited by:

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    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

    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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