Governing the economics of the common good

To meet today’s grand challenges, economics requires an understanding of how common objectives may be collaboratively set and met.
Tied to the assumption that the state can, at best, fix market failures and is always at risk of “capture”, economic theory has been unable to offer such a framework.
To move beyond such limiting assumptions, the article provides a renewed conception of the common good, going beyond the classic public good and commons approach, as a way of steering and shaping (rather than just fixing) the economy towards collective goals.

In political philosophy, the common good offers an avenue to explore the link between individual and communal interests.
The common good is considered “proper to, and attainable only by, the community, yet individually shared by its members”.

• Private goods are excludable and rival. They are goods that can only be consumed by a limited number of people at a time. They are often created with the objective of commercialisation or profit-maximisation. Examples are clothing or food.
• Public goods are non-excludable and non-rival. Because they are non-excludable, the private sector has little incentive to invest as they cannot appropriate the profits. As they are non-rival, one person’s access does not limit another one’s access. Recently, this concept has been elaborated with an international dimension through the idea of global public goods. Examples are environmental protection and national defence.
• Club goods are non-rival, but excludable. One has to pay, but the access is open to all who can pay, hence they are non-rival. One person consuming does not reduce the ability of another person to consume as long as they pay. Examples are subscription TV services and the theatre.
• Common-pool resources are the opposite of club goods: they are rivalrous but non-excludable. They are non-excludable because excluding people from use proves difficult and they are rivalrous because the benefits are not without limit – there are only so many fish in the sea – but the (limited) benefits are good for all. Examples are fisheries and forests.

	Scope	Focus	Limitations
Public Good	National	State fixes market failures and provides non-rival and non- excludable goods	Oriented towards maximisation of private rather than collective interest; state regarded as market-fixing
Global Public Good	International	Global coordination between states based on overexploitation and under-provision	Top-down with risk of democratic deficit; rooted in market failure framework
Commons and Common-Pool Resources	Local	Communities govern resources an alternative to the state vs. market dichotomy	Limited to the local level; implicitly assumes state to be weak

Five pillars for the common good

A revived approach to the common good, posited as a collective objective rather than a correction focuses as much on the “how” as the “what”. It can be guided by a market shaping view of government, driven by public value.
The first pillar, purpose and directionality, can promote outcomes-oriented policies that are in the common interest.
The second pillar, co-creation and participation, allows citizens and stakeholders to participate in debate, discussion, and consensus-building that bring different voices to the table.
The third pillar, collective learning and knowledge-sharing, can help design true purpose-oriented partnerships that drive collective intelligence and sharing of knowledge.
The fourth pillar, access for all and reward-sharing, can be a way to share the benefits of innovation and investment with all the risk takers, whether through equity schemes, royalties, pricing, or collective funds.
The fifth pillar, transparency and accountability, can ensure public legitimacy and engagement by enforcing commitments amongst all actors and by aligning on evaluation mechanisms.

The framework has provided a systematic review and reconceptualisation of the necessary steps that may be taken by economic actors to create public value while achieving collectively deliberated goals.
The article has shown that with increasing attention to the need for such common goals, the philosophical tradition of the common good, centred on “relational” obligation and mutual concern, can provide helpful guidance. Previous economic good scholarship has not given sufficient consideration to the governance of collective goals and the therein embedded role of mutual – rather than private – concern.

Putting the common good at the heart of governance empowers and encourages governments, business, and civil society to actively shape markets and to incorporate public value into the coordination required to meet common objectives.

The common good principles described here are not meant to replace insights from previous notions of public goods and the commons, but to complement them by providing a framework that guides a symbiotic relationship between economic actors.
This perspective acknowledges that no single actor, whether it be government, business, or civil society, should be positioned as more important or more able than another to create value.
Engaging these actors in a cooperative manner to solve problems that are set and solved collectively becomes crucial in the pursuit of addressing the complex challenges that define the 21st century. By fostering a collaborative approach, where knowledge is shared, rewards are socialised, and accountability and transparency are at the forefront, the common good can effectively guide societal actors towards creating public value that is not only shared but also sustainable.