Influence of Agents' Risk Tendencies on Global Partnerships: Case on Gavi, the Vaccine Alliance

Abstract

Global partnership has been the center of discussion in the field of global governance especially since the creation of the Millennium Development Goals. Paris Declaration in 2005 and Accra Agenda for Action in 2008 have also emphasized global partnership as a major principle for development aid effectiveness. The 4th High Level Forum on Aid Effectiveness has also put grave importance on global partnerships, especially the role of non-governmental agents. Post 2015 development agenda puts value on actual implementation of development policies, and global partnership is critical in doing so. Despite the mentioned importance, global partnership faces double road block in the field of both theory and practice. While global governance is surely taking place in various sectors, the actual realization of partnerships is limited both in number, quality, fund, and its effectiveness. Current literature on global partnerships makes attempts to explain why agents form global partnerships, but fails to elaborate on when and in what actual condition global partnerships occur. Moreover, discussions on incentives for partnerships and how to fund them also have many rooms for addition. The primary concern of the paper is to attempt to provide answers to the upper mentioned problems. The paper incorporates J. von Neumann and O. Morgensterns Expected Utility Theory and the concept of risk tendency of economics to the field of global partnerships to provide a new framework for evaluating in what condition global partnerships occur. The paper categorizes agents of global partnerships into risk neutral, risk averse, and risk seeking agents and attempts to clarify whether or not they would participate in a fair partnership, favorable partnership, and unfavorable partnership. Then the paper will attempt to cast light on the quantitative amount of incentives that are needed to induce the agents to form partnerships, and how to fund them. In attempting to provide answers to these problems, I will be applying graphical evidences as an attempt to provide quantitative insights to the problem and differentiate my paper from the existing literatures. Then the paper analyzes the case of Gavi, the vaccine alliance with the proposed framework.