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Slide 1 - Stonehill College

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									                        Stonehill College




 The Other Side
 of Globalization
                         Thomas Pogge

Leitner Professor of Philosophy and International Affairs, Yale University
                      with additional affiliations at
    the ANU Centre for Applied Philosophy and Public Ethics (CAPPE)
and the University of Oslo Centre for the Study of Mind in Nature (CSMN)
      0
You’re welcome
 to have a copy
   of this PPT
        1
The Official Story
  about Poverty
and our Response
The Official Tracking of Poverty
The first Millennium Development Goal (MDG-1) tracked
by the United Nations (UN) envisions that the percentage
of the population of the less developed countries (‘LDCs’)
living below the International Poverty Line (IPL) should
in 2015 be no more than half of what it was in 1990.
Maintained by the World Bank, the IPL defines as poor
those whose income or local cost of consumption falls
below USD 1.25 (2005 PPP) per person per day.
PPP = purchasing power parities (not FOREX or currency
exchange rates) in the year 2005. “International dollars.”
USD 1 = INR 15.60 (vs. INR 44.00 FOREX)
In each country, the consumer price index (CPI) is used
to calculate the equivalent to the IPL for years other
than 2005. For example, the IPL is equivalent to USD
1.40 in the US today (2010).                            3
  The Grand Promise to Halve
Poverty by 2015: Three Versions
1996 World Food Summit in Rome: number
of extremely poor is to be halved during 1996-
2015. This implies an annual reduction by 3.58%.
                                  (www.fao.org/wfs)

2000 Millennium Declaration: the proportion
of extremely poor among the world’s people is
to be halved 2000-2015. This implies annual
decline by 3.35% (40% in 15 yrs).
The First Millennium Development Goal
(MDG-1) as subsequently formulated by the UN:
the proportion of extremely poor among the
population of the developing countries is to
be halved 1990-2015. This implies an annual
reduction by 1.25% (27% over 25 years).
MDG-1: A Promise Diluted
                        Baseline     Promised            Required
                        Number      Reduction  Target     annual
              Baseline  of Poor     in number for 2015    rate of
               Year    (millions)     by 2015 (millions) reduction


 World
                                    50% in
 Food         1996       1656
                                    19 yrs      828      3.58%
Summit


                                    40% in
Millennium
Declaration   2000       1665
                                    15 yrs      999      3.35%


 MDG-1
                                    27% in
as now        1990       1813
                                    25 yrs    1324       1.25%
tracked
      MDG-1: World Poverty
            YEAR                  Poverty Rate in LDCs
            1981                         51.8%
            1984                         46.6%
            1987                         41.8%
            1990                         41.6%
            1993                         39.1%
            1996                         34.4%
            1999                         33.7%
            2002                         30.6%
            2005                         25.2%
            2015 target                  20.8%
Good news, we are well ahead of schedule toward achieving MDG-1!!
                econ.worldbank.org/docsearch; Paper 4703, p. 42
            Reality Check
While the Bank reports a stream of good news
from the poverty front, the FAO has recently
reported that the number of chronically
undernourished people (Target 2 of MDG-1) is
above 1 billion for the first time ever. In the
1990s and until 2006 this number was reported
to be around 800 million. One important cause:
food prices doubled 2006-08 (partly because of
rapidly rising biofuel demand).
         www.fao.org/news/story/en/item/20568/icode/ …
Six Main Problems with IPL Headcount
1. Priority for those just below the IPL

2. Distortion through use of general-consumption PPPs




                                                    8
   PPPs Don’t Reflect the Cost
     of Meeting Basic Needs
The much narrower and more poverty-relevant
PPPs for “food and nonalcoholic beverages” are
considerably higher ― in each and every one of
88 listed poor countries ― than the broader
PPPs used in the Bank’s conversion. They are,
on average, 51.6 percent higher. Thus, at the
Bank’s converted IPL, poor people on average
can buy about as much food as could be bought
with USD 0.83 in the US in 2005.
siteresources.worldbank.org/ICPINT/Resources/icp-final.pdf, pp. 28-37
                                                                    9
     COUNTRY               2005 PPPihhc    2005 PPPfnb     Ratio
         Angola                    70.50          126.79   1.798
       Argentina                    1.35            1.70   1.259
        Armenia                   196.19          277.66   1.415
      Bangladesh                   25.49           34.28   1.345
         Benin                    275.90          495.42   1.796
        Bhutan                     18.46           25.39   1.375
         Bolivia                    2.57            3.61   1.405
       Botswana                     3.38            5.43   1.607
          Brazil                    1.57            1.69   1.076
  Brunei Darussalam                 1.08            1.50   1.389
     Burkina Faso                 242.42          388.15   1.601
        Burundi                   447.04          803.65   1.798
       Cambodia                  1615.30         2304.16   1.426
      Cameroon                    294.50          471.30   1.600
      Cape Verde                   78.17           97.06   1.242
Central African Republic          307.47          566.14   1.841
          Chad                    327.57          597.46   1.824
                                                                   10
  COUNTRY           2005 PPPihhc    2005 PPPfnb     Ratio
    Colombia              1191.74         1738.54   1.459
    Comoros                294.41          470.80   1.599
Congo, Dem. Rep.           316.23          542.69   1.716
   Congo, Rep.             375.57          632.74   1.685
   Cote d'Ivoire           325.81          528.52   1.622
     Djibouti              107.81          185.37   1.719
     Ecuador                 0.50            0.66   1.320
 Egypt, Arab Rep.            2.02            3.00   1.485
Equatorial Guinea          436.29          736.79   1.689
     Ethiopia                2.75            4.13   1.502
        Fiji                 1.55            1.78   1.148
      Gabon                443.75          751.51   1.694
   Gambia, The              10.34           23.21   2.245
     Georgia                 0.78            1.04   1.333
      Ghana               4475.82         8920.97   1.993
     Guinea               1479.57         2947.16   1.992
  Guinea-Bissau            284.28          461.33   1.623
                                                            11
  COUNTRY            2005 PPPihhc    2005 PPPfnb     Ratio
       India                 15.60           21.13   1.354
    Indonesia              4192.83         5817.59   1.388
Iran, Islamic Rep.         2714.82         5664.83   2.087
        Iraq                639.87          820.45   1.282
   Kazakhstan                64.96           71.24   1.097
       Kenya                 32.68           54.14   1.657
 Kyrgyz Republic             13.00           18.69   1.438
     Lao PDR               3741.62         5999.52   1.603
     Lebanon               1107.12         1149.93   1.039
     Lesotho                  3.43            5.66   1.650
      Liberia                 0.51            0.89   1.745
   Madagascar               756.38         1367.97   1.809
      Malawi                 56.92          100.86   1.772
     Malaysia                 2.11            2.76   1.308
     Maldives                 9.74           11.30   1.160
        Mali                289.68          482.74   1.666
   Mauritania               125.67          223.16   1.776
                                                             12
      Mexico                  7.65            8.16   1.067
    COUNTRY             2005 PPPihhc    2005 PPPfnb     Ratio
       Moldova                   4.83            6.35   1.315
       Mongolia                522.49          697.10   1.334
     Montenegro                  0.50            0.66   1.320
       Morocco                   5.51            7.82   1.419
     Mozambique              11625.69        18411.54   1.584
       Namibia                   5.06            7.03   1.389
         Nepal                  26.47           34.09   1.288
         Niger                 267.33          460.78   1.724
        Nigeria                 78.58          159.02   2.024
       Pakistan                 20.71           33.45   1.615
       Paraguay               2127.80         2621.79   1.232
          Peru                   1.65            2.28   1.382
      Philippines               24.18           33.60   1.390
       Rwanda                  236.75          333.21   1.407
Sao Tome and Principe         6363.13        10467.10   1.645
        Senegal                298.24          522.49   1.752
         Serbia                 34.31           48.03   1.400
                                                                13
         COUNTRY                 2005 PPPihhc    2005 PPPfnb     Ratio
         South Africa                     4.57            5.53   1.210
           Sri Lanka                     40.04           59.95   1.497
             Sudan                      123.51          209.25   1.694
          Swaziland                       3.73            5.64   1.512
     Syrian Arab Republic                24.65           28.17   1.143
           Tajikistan                     0.93            1.39   1.495
           Tanzania                     482.45          793.51   1.645
              Togo                      282.26          506.06   1.793
            Tunisia                       0.70            1.01   1.443
            Turkey                        1.00            1.29   1.290
            Uganda                      744.62         1040.09   1.397
        Venezuela, RB                  1251.12         1833.68   1.466
           Vietnam                     5919.89         8352.05   1.411
         Yemen, Rep.                     91.06          114.72   1.260
            Zambia                     2830.33         3930.78   1.389
          Zimbabwe                    47952.42        70339.25   1.467
Average Ratio (geometric mean)                                   1.496   14
Why the Consistent Divergence
… of food PPPs from the more general PPPs for
individual household consumption expenditure?

Price differentials across countries (at FOREX)
are smaller the more “tradable” (easily traded
across national borders) commodities are. So
it is the non-tradable commodities, such as
services, that drive PPPs away from FOREX.
Foodstuffs are at the tradables end of the
spectrum, where international price
differentials tend closely to reflect FOREX.
                                                  15
      A Hypothetical Example
                                                                  Price
                    Poor Country           United States
                                                                  Ratio

Commodities                                         Share of
                            Share of                            Computed:
                  Price                  Price      National
                            National
                    in
                          Consumption
                                          in      Consumption   1 Peso
                  Pesos
                            Spending
                                        Dollars     Spending    = $1.55


 Necessities       5       30%            3        10%           0.60

Discretionaries    6       50%            4        50%           0.67

   Services        1       20%            9        40%           9.0016
Is $1.25 (2005 PPP) a day enough?
In 2005, the USDA quantified the cost of
living on its Thrifty Food Plan, “a nutritionally
adequate diet for short-term or emergency
use,” at between $3.59 and $4.97 per person
per day (depending on household size and
children’s ages). This includes no money at
all for minimal requirements of clothing,
shelter, medical care, water and other
utilities.
                                                   17
             www.cnpp.usda.gov/USDAFoodCost-Home.htm
Six Main Problems with IPL Headcount
1. Priority for those just below the IPL

2. Distortion through use of general-consumption PPPs

3. Excessive sensitivity of trend to IPL level




                                                   18
How IPL Level Affects the Trend
                                           Relative
         1981- 1984- 1987- 1990-          to path of   1993- 1996- 1999-
IPL at                     2005
         2005 2005 2005 (-17.2%)           diluted     2005 2005 2005
2005                                        MDG-1
 PPPs


                                             40%
$1.25    -27%   -24% -20% -24%                         -23% -17% -19%
                                            ahead



                                            59%
$2.00    +1%     -2%      -3%     -7%                   -9%     -9%     -11%
                                           behind



                                           103%
$2.50    +13%    +8%     +5%     +.45%                  -3%     -5%      -7%
                                           behind

    http://econ.worldbank.org/docsearch, working paper 4703, Table 7, pp. 44-45
“Updating” the World Bank’s
 International Poverty Line
The Bank initially fixed its IPL at 1.02 1985-dollars
per day, noting that eight poor countries’ 1985
domestic poverty lines were close to this amount.
Soon rounded down to 1.00 1985-dollar per day.
In 2000 the Bank reset its IPL to 1.08 1993-dollars
per day, noting that this was the median of the ten
lowest domestic poverty lines in 1993.
In 2008 the Bank reset its IPL to 1.25 2005-dollars
per day, noting that this was the mean of the fifteen
poorest countries’ domestic poverty lines.
Many of the domestic poverty lines used to “anchor”
all these IPLs are themselves fixed by the Bank.
“Updating” the World Bank’s
 International Poverty Line
Used from 1990 until 1999:
   1.02 1985-dollar per day, today $2.07 in US
   1.00 1985-dollar per day, today $2.03 in US

Used from 2000 until 2008:
   1.08 1993-dollar per day, today $1.62 in US

Used since August 2008:
   1.25 2005-dollar per day, today $1.40 in US
            or $9.80 per week or $510 annually
              www.bls.gov/data/inflation_calculator.htm.

India INR 19.50/day; 593/mth; 7120/yr (2005)
                                           21
Would Faster Progress or a Higher
 IPL be Hopelessly Unrealistic?
Using its latest IPL ($1.25 per day or $38 per month,
in 2005 int’l dollars), the World Bank counted 1.38 billion
poor people living 30% below this line on average. Total
deficit: 0.17% of world income (0.33% at PPP).
With a less inadequate poverty line of $2 per day or $61
per month (2005 int’l dollars), the Bank counted 2.56
billion poor people living 40% below this line on average.
Total deficit: 0.66% of world income (1.28% at PPP).
With a more HR-realistic poverty line of $2.50 per day
or $76 per month (2005 int’l dollars), the Bank counted
3.08 billion poor living 45% below this line on average.
Total deficit: 1.13% of world income (2.2% at PPP).
                                                            22
        econ.worldbank.org/docsearch; Paper 4703, pp. 23, 34-5
IPL Level and Global Poverty Gap
  IPL in     Poor People in 2005       Aggregate Shortfall from the IPL
2005 int’l
 dollars                   Average      in percent of gross    in $bn
   per        Number       Shortfall       global income         p.a.
 person      in billions   from the                 at current (2005)
 per day                      IPL      at PPPs
                                                     exchange rates



$1.25         1.38         30%         0.33% 0.17%             76

$2.00         2.56         40%         1.28% 0.66%            296

$2.50         3.08         45%         2.2% 1.13%             507
                                                                        23
Six Main Problems with IPL Headcount
1. Priority for those just below the IPL

2. Distortion through use of general-consumption
   PPPs

3. Excessive sensitivity of trend to IPL level

4. Disregard for other dimensions of poverty:
   leisure/labor, climate…

5. Disregard (through household surveys) of intra-
   household distribution and varying course-of-life
   needs

6. Inconsistency in methodology as revealed by         24
 How International Purchasing Power
Comparisons are Base-Year Dependent




Country A AV   [A’s CPI V-W]    AW       [A’s CPI W-X]   AX   [A’s CPI X-Y]     AY
                                  |                                             |
                                  |                                             |
                                  |                                             |
                           [PPP of| Year W]                             [PPP of | Year Y]
                                  |                                             |
                                  |                                             |
                                  |                                             |
Country B BV   [B’s CPI V-W]     BW      [B’s CPI W-X]   BX   [B’s CPI X-Y]      BY

                               Base Year W                                    Base Year Y




                                                                                            25
    2

Inequality
 SURPRISE QUIZ ON
GLOBAL INEQUALITY
                                 Share of Global
Segment of World Population   Household Income 2005
      Richest Ventile

     Next Four Ventiles

      Second Quarter

      Third Quarter

      Poorest Quarter
                Global Inequality
At current exchange rates, the poorest half of
world population: 3,400 million, have under 3%
of global household income―as against 2% had
by the most affluent 30,000 (0.01%) in the US.
The per capita income ratio between the top 5%
and the bottom 40% is 200:1.
                                 Spreadsheets from Branko Milanovic, World Bank
                     Saez “Tables and Figures Updated”, elsa.berkeley.edu/~saez/


At current exchange rates, the poorest half of
the human population, some 3,400 million, have
ca. 1% of global wealth ― as against 3% had by
the world’s 1125 billionaires (2008!). (9m:1)
                               www.iariw.org/papers/2006/davies.pdf, table 10A, p. 47
www.forbes.com/2008/03/05/richest-billionaires-people-billionaires08-cx_lk_0305intro.html
              Share of  Share of
                                   Absolute
               Global    Global                 Relative
                                   Change in
Segment of   Household Household               Change in
                                    Income
  World       Income    Income               Income Share
                                     Share
Population      1988      2005
 Richest
 Ventile     42.87      46.36      +3.49 +8.1%
Next Four
 Ventiles    46.63      43.98       -2.65      -5.7%
Second
Quarter       6.97       6.74       -0.23      -3.3%
 Third
Quarter       2.37       2.14       -0.23      -9.8%
Poorest
Quarter       1.15       0.77       -0.38 -32.9%
  What is Happening Globally?

Growth in international inequality has stalled as
fast growth in China and India balances slow/no
growth in the poorest (“bottom billion”) countries.
Since mid-1990s no longer a significant driver of
global inequality


                    Best source: Branko Milanovic, World Bank
                          e.g. Worlds Apart, Princeton UP 2005

                                                            30
    Rising Inequality in the US

In the last US economic expansion (2002-07),
average per capita household income grew
16%.

In the top one percent this growth was 62%,
in the remainder of the population 6.7%.

The top percentile captured 65% of the real
per capita growth of the US economy (45% in
the 1993-2000 Clinton expansion).
      Saez “Updated”, elsa.berkeley.edu/~saez/, Table 1, from IRS Data
                                                                    31
      Rising Inequality in the US
                               (1978-2007)
The income share of the bottom half declined from
26.4% to 12.8%. Meanwhile, that of the top one
percent rose from 8.95% to 23.50% (2.6-fold);
that of the top tenth percent from 2.65% to 12.28%
(4.6- fold); and that of the top hundredth percent
from 0.86% to 6.04% (7-fold; Saez Table A3). The top
hundredth percent (30,000 people) now have nearly
half as much income as the bottom half (150 million)
of Americans – and about two-thirds as much as the
bottom half (3400 million) of world population.
                                                                                                    32
    finance.yahoo.com/banking-budgeting/article/107575/rise-of-the-super-rich-hits-a-sobering-wall.html
Kuznets curve is the graphical representation of Simon Kuznets's theory ('Kuznets
hypothesis') that economic inequality increases over time while a country is
developing, then after a critical average income is attained, begins to decrease.
One theory as to why this happens states that in early stages of development,
when investment in physical capital is the main mechanism of economic growth,
inequality encourages growth by allocating resources towards those who save and
invest the most. Whereas in mature economies human capital accrual, or an
estimate of cost that has been incurred but not yet paid, takes the place of physical
capital accrual as the main source of growth, and inequality slows growth by
lowering education standards because poor people lack finance for their education
in imperfect credit markets. Kuznets curve diagrams show an inverted U curve,
although variables along the axes are often mixed and matched, with inequality or
the Gini coefficent on the Y axis and economic development, time or per capita
incomes on the X axis.    Wikipedia                                                33
What’s Happening in China?

  In China, 1990-2004, the income
  share of the bottom half declined
  from 27% to 18% ― while that
  of the top tenth rose from 25%
  to 35%.
   papers.ssrn.com/sol3/papers.cfm?abstract_id=799844
Note new inequality figures at WB: World Development Indicators
                                                                  34
      3
Globalization
as Part of the
 Explanation
           Three Claims
• Today, most premature human deaths
  and other deprivations are causally
  traceable (“but for”) injustice in existing
  supranational institutional arrangements

• for which the more powerful countries
  and their citizens are responsible

• in violation of human-rights-correlative
  negative duties of justice.
                                           36
     Counter-Argument

Poverty is evolving differently in the
various developing countries and regions.
This shows that local (e.g., national)
factors account for the persistence of
severe poverty where it persist.



                                       37
Conceptual Answer to
the Counter-Argument
It merely shows that local factors are
co-responsible for the persistence of
severe poverty. It does not show that
local factors are solely responsible.
Example: Differential learning success
of students/pupils in the same class.

                                         38
       Global           National Institutional
                       Schemes of the Various
Institutional Order   Less Developed Countries




                 .
                        Poor and Vulnerable
                        Citizens in the Less
                        Developed Countries

                                               39
Empirical Answer to the Counter-Argument:
 Specific Examples of Poverty-Aggravating
    Global Institutional Arrangements
Global institutional order works against HR fulfillment
directly: rules of trade and finance (with asymmetrical
protectionism); permissive environmental rules
(fostering greenhouse gases and resource depletion).
… works against HR fulfillment indirectly, by incentivizing
and sustaining HR-violating regimes and policies in poor
countries: international resource, borrowing, treaty, arms
privileges; intellectual property rights in seeds and
medicines; “race to the bottom” in labor standards.
The facilitation of illicit financial flows exemplifies both:
draining poor countries of revenues through tax evasion
and embezzlement (US$850-1000 billion annually) and
fostering corruption and oppression in those countries.
               www.ffdngo.org/documentrepository/GFI%20Report.pdf
              Global Institutional Order
                                        4 Privileges
                                            Pharmaceuticals
                                                 Labor Standards
                                 Dirty Money

                                       National Institutional
Governments of the   Protectionism
                     Pollution Rules     Schemes of the
  More Powerful
                                           Various Less
    Countries
                                       Developed Countries



 Corporations and
                                       Poor and Vulnerable
  Citizens of the
                                       Citizens in the Less
  More Powerful
                                       Developed Countries
     Countries
                                                                   41
Systemic Problem: Regulatory
Capture with Inequality Spiral
Often in concert, the richest players influence the rules
and their application, thereby expanding their own
advantage. Such run-away inequality strengthens, in
each round, both the incentives and the opportunities
for influence. Public facilities come under the influence
of players with special and often near-term interests,
who buy support from media and academics for this
purpose (venality esp. of economists who live up to
their homo oeconomicus paradigm). Special interests
have been especially effective in influencing
international agreements (WTO Treaty) and
organizations (WIPO, World Bank).                       42
The Human Right Least Realized
“Everyone has the right to a standard
of living adequate for the health and well-
being of himself and of his family, including
food, clothing, housing and medical care
and necessary social services, and the right
to security in the event of unemployment,
sickness, disability, widowhood, old age or
other lack of livelihood in circumstances
beyond his control.”
   Article 25(1), Universal Declaration of Human Rights, 1948
                                                            43
 The Effects of World Poverty
Among ca. 6800 million human beings, about
1020 million are chronically undernourished (FAO 2009),
2000 million lack access to essential drugs
      (www.fic.nih.gov/about/plan/exec_summary.htm),
 884 million lack safe drinking water (WHO/UNICEF 2008, 32),
 924 million lack adequate shelter (UN Habitat 2003, p. vi),
1600 million have no electricity (UN Habitat, “Urban Energy”),
2500 million lack adequate sanitation (WHO/UNICEF 2008, p. 7),
 774 million adults are illiterate (www.uis.unesco.org),
 218 million children (aged 5 to 17) do wage work outside their
household — often under slavery-like and hazardous conditions:
as soldiers, prostitutes or domestic servants, or in agriculture,
construction, textile or carpet production (ILO: The End of Child
Labour, Within Reach, 2006, pp. 9, 11, 17-18).                    44
At Least a Third of Human Deaths
— some 18 (out of 57) million per year or 50,000
daily — are due to poverty-related causes, cheaply
preventable through safe drinking water, better
sanitation, more adequate nutrition, rehydration packs,
vaccines or other medicines. In thousands:
        diarrhea (2163) and malnutrition (487),
    perinatal (3180) and maternal conditions (527),
       childhood diseases (847 — half measles),
 tuberculosis (1464), meningitis (340), hepatitis (159),
    malaria (889) and other tropical diseases (152),
   respiratory infections (4259 — mainly pneumonia),
 HIV/AIDS (2040), sexually transmitted diseases (128)
 WHO: World Health Organization, Global Burden of Disease:
         2004 Update, Geneva 2008, Table A1, pp. 54-59 45.
                      Millions of Deaths
Worldwide Poverty
Deaths 1990-2009                                                   >300
World War Two
    1939-45                          60
 Mao's Great Leap
 Forward 1959-62                30
Stalin's Repression
      1924-53                  20
World War One
    1914-18                 17
Russian Civil War
    1917-22                9
Congo Free State
   1886-1908              7.5
Korea and Vietnam
1951-54, 1965-74          5.5

                      0         50        100   150   200   250   300
                                                                        46
         International Law
        Divided against Itself
Since World War II, governments have created a
well-publicized and highly visible but largely ineffective
body of international law that recognizes, codifies and
celebrates human rights. Governments often appeal to
these documents to raise the image of themselves and
their friends or to tarnish the image of their rivals.

Over the same period, governments have created a
vast and effective system of supranational legal rules
and regimes — barely understood and under little
democratic oversight — that are formulated and
administered without concern for human rights and
in fact massively violate human rights.                  47
      Human Rights as
 Moral Claims on (Global)
Institutional Arrangements
 “Everyone is entitled to a social
 and international order in which
 the rights and freedoms set forth
 in this Declaration can be fully
 realized.”
Article 28, Universal Declaration of Human Rights, 1948   48
  4
Reform
   Poverty and Overpopulation
In the last fifty-five years, the Total Fertility Rate (TFR)
has dropped from 5.42 to 1.72 in Eastern Asia, for
instance, and from 3.04 to 1.38 in Portugal and from
3.18 to 1.83 in Australia. In economically stagnant poor
countries, by contrast, there has been little change over
the same period: Equatorial Guinea went from 5.50 to
5.36, Mali from 6.23 to 5.49, Niger from 6.86 to 7.15,
and Sierra Leone from 5.52 to 5.22 (United Nations
2008). The correlation is further confirmed by synchronic
comparisons. Currently, the total fertility rate is 4.39 for
the 50 least developed countries versus 1.64 for the
more developed regions, and 2.46 for the remaining
countries (ibid.).        Best sources: http://esa.un.org/unpp
  https://www.cia.gov/library/publications/the-world-factbook/rankorder/2127rank.html
                                                                                    50
The Aim of Political Efforts Should
― constitute an enduring structural reform;
― effectively symbolize the idea that all human
  lives are of equal value, genuine moralization;
― benefit a strong, well-organized faction of the
  global elite (new profit opportunities, image
  improvement, reduced volatility);
― be scalable and can be increased and/or
  adjusted as experience warrants;
― strengthen those with an objective interest
  in reform: empowerment of the global poor;
― be an exemplar of realistic moral leadership,
  replicable creation of a global public good.      51
Rules Governing the Development
and Distribution of New Medicines

Under the TRIPS agreement – part of the WTO
Treaty and a paradigm example of regulatory
capture – the intellectual property regime of the
affluent countries was globalized by being made
a mandatory condition of WTO membership.
Pharmaceutical innovators must be granted 20-
year product patents in all WTO member states.
The Health Impact Fund (HIF)
• is financed by willing governments at minimally
  $6 billion per annum (0.01% of GNI, if universal).
• The HIF promises to reward (upon registration)
  any new medicine annually for ten years on the
  basis of its global health impact.
• Registering a new medicine with the HIF is
  voluntary for the innovator, who need not give
  up any intellectual property rights.
• Registrant must agree to make the new medicine
  available wherever it is needed at the lowest
  feasible cost of manufacture and distribution and
  to grant zero-priced licenses after reward period.
• www.HealthImpactFund.org                         53
                Financing
• $6 billion a year is about 0.01% of global
  income, not even 1% of current worldwide
  expenditures on pharmaceuticals.
• Full incentive effects on potential innovators
  require long-term commitment by funders.
• Only governments (of affluent and developing
  countries) can plausibly commit large sums
  long-term. We propose a small share of GNI,
  perhaps 0.03%, for each partner country.
• All or most of this comes back to taxpayers
  through lower prices for medicines, insurance,
  national health systems, and foreign aid.
                                               54
 Two Different Adaptations
Extension to clean/green technologies: free
access to patented knowledge in exchange for
rewards proportioned to emissions averted.

Extension to agricultural innovation: pay
innovators on the basis of incremental
nutrients produced, and/or use of pesticides
and fertilizers avoided, through use of their
invention on the fields where it is deployed.
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