ABSTRACT
A new development frontier is emerging and with it a new role, and perhaps a new rationale, for foreign aid. The motivation to contribute to the supply of a particular international public good depends on the degree to which potential contributors are affected by the transboundary problem that the public good is designed to correct. Investments in international public goods can make national development efforts more productive. Its control requires transboundary action, since disease vectors do not recognize national borders. There normally is a case for action at the national level too. In contrast to conventional foreign aid that focuses on individual countries, transnational problems demand a multi-country, problem-oriented approach to development cooperation. Public goods tend to be undersupplied. Take the case of worldwide investment in drug and vaccine development for tropical diseases. Investment is far below the needs dictated by the epidemiological and economic importance of the afflictions.
