How might a stable international monetary regime be considered a collective good?
A stable international monetary regime should clearly be considered as a collective good (also known as a public good). To understand why this is so, let us first look at the definition of a collective good.
There are two main aspects to collective goods. First, they can be consumed in what is called a “non-rivalrous” way. What this means is that when one person or country consumes a collective good, it does not diminish anyone else’s ability to do so. If I breathe clean air, I am not reducing your ability to do the same. Second, no one can be excluded from consuming these goods. If the air is clean, I cannot force you to breathe dirty air because you did not pay your fair share of the cost of cleaning the air.
A stable international monetary regime would fit this definition. If the monetary regime is stable, it will benefit all countries. The regime will help ensure that the global economy is more stable. This will help all countries. One country’s benefit does not reduce that enjoyed by another country. In addition, it will be impossible to exclude any country from taking advantage of the benefits. It would not be possible to tell one country that it must trade in an unstable system because the stability would be like the clean air; it would simply be a fact of life that all countries would enjoy.
For these reasons, a stable international monetary regime would be a collective good.