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

Margaret K Kyle, David Ridley and Su Zhang

No 12419, CEPR Discussion Papers from C.E.P.R. Discussion Papers

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.

Keywords: free riding; health; Innovation; pharmaceuticals; Public Goods (search for similar items in EconPapers)
JEL-codes: H4 H5 I18 O1 O3 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-pbe and nep-pub
Date: 2017-11
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