|THE PROBLEM OF COLLECTIVE GOODS|
Scholars who study how nations achieve cooperation despite the lack of a centralized world government to enforce rules pay special attention to the collective goods problem. A collective good is any benefit enjoyed by all members of a group regardless of their individual contribution. Each member faces the temptation to contribute less than other members towards maintaining the collective good. However, if too many members fail to meet their responsibilities, the good will not exist for anyone. For example, the stocks of fish in the world’s oceans are a collective good. Each country benefits by catching more fish, yet if all countries maximize their catch the fish stocks decline, as happened around 1990 when global fish catches dropped sharply. In domestic political arenas, governments solve the collective goods problem by enforcing laws, such as making people pay their taxes or repair cars that pollute excessively. Collective goods problems present difficult dilemmas because no governmental authority exists to enforce agreements internationally.
Collective goods problems affect almost every issue studied by students of international political economy. In trade relations, each nation benefits from the ability to export its products to other national markets, but may gain by raising its own tariffs to restrict imports from other nations. In international currency exchange, each nation benefits from stable exchange rates that facilitate trade and business, but may seek to unilaterally devalue its own currency to rectify a trade deficit. In global environmental management, each nation benefits from sustainable fisheries, stable climate, and an intact ozone layer, but would rather have other nations bear the costs of maintaining these benefits.
Solutions to collective goods problems in the international political economy generally involve international agreements and institutions that coordinate the actions of various nations. Neoliberal institutionalist scholars generally find such solutions workable, though imperfect. However, realist scholars are far more pessimistic about solving collective goods problems, because they see nations as self-interested and mainly motivated by the desire to maximize power relative to other nations.