Initiative for the Promotion of Regional Public Goods

Under the terms of the Initiative for the Promotion of Regional Public Goods (RPGs), approved by the IDB Board of Executive Directors on March 22, 2004, non-reimbursable resources will be made available to finance projects that support the development of RPGs.

The increased importance of RPGs results in part from policy reforms that seek to open domestic markets, to increase competitiveness in a global economy and to take advantage of technological change. Regional public goods are also essential for dealing with the vulnerabilities created by greater openness, such as the contagion of financial crises and the cross-border transmission of human and animal diseases. In addition, RPGs are increasingly perceived as part of the solution to long-standing development problems across a wide spectrum of sectors.

The premise behind the Bank’s support for RPGs is that many problems or issues shared by a number of countries can be dealt with most effectively at a regional level through international cooperation in the production of public goods. The promise offered through the production of RPGs, however, is often unrealized because of the difficulty in obtaining financial and institutional support for a regional effort. Countries are concerned about the “free rider” possibility--that they may be subsidizing the access of other countries to the benefits of the RPG. This inhibiting concern requires the intervention of an appropriate regional organization to foster the dialogue and actions culminating in the production of an RPG.

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