Burden Sharing in Support of the United Nations Appendix B

The estimates of individual country assessments presented in this paper were devised, in principle, to show what kind of economic and statistical considerations could be brought to bear on the problem of international burden sharing. The approaches of this paper evolved first from attempts to share the cost of financing a UN standing army (see footnote 2). That was purely hypothetical and based on very rough estimates of what such an endeavor might cost. In that research, a budget of $50 billion was assumed, as a base case, and is much larger than the present practical case of financing a core budget for the UN Secretariat of less than $1.5 billion.

As has been explained in the text, data were taken from the Human Development Report and from the PENN Tables. This was done in order to examine the effects of alternative valuation procedures for international comparisons and for alternative concepts of a featured aggregate (gross domestic product, gross national product, national income, etc.). During the recent period (spring 1997) of intense discussion of financing the UN, at a very practical and specific level and also at a very political level, it became appropriate for us to look into calculations with our approach, according to Rule 4 (see Appendix A).

In this latest application of our assessment principles worked out in this Appendix, we followed some definite specifications:

1. The total sum to be considered is $1.248 billion (not $1.5 billion).

2. The aggregate concept to be used is adjusted national income. The adjustment involves a subtraction from income of a low income allowance and for special consideration of heavily indebted countries. These allowances are thus implicit in the estimated figures for the assessable base.

3. Market exchange rates are used for conversion of each country's adjusted national income to current US dollars.

4. Only UN member countries are to be included in the calculation. This was not the case in the tabuluations from the PENN Tables and the Human Development Report.

In addition, a slight change was made in the procedure for estimating the parameters (A,a) of

T/N = A(Y/N)^a

We imposed a constraint that the total sum of assessments had to equal $1,248 billion. Instead of forcing the fitted curve to pass through two points (a floor and a ceiling) we determined a value for a by fixing the ratio of "ceiling" to "floor" values of the fitted function. Also, instead of choosing the ceiling value by making the US assessment 25% of the total sum, we made computations for 5 different values - 20%, 21%, 22%, 23%, and 24%. Political sentiment has subsequently drifted towards 20%. The programming is extremely simple-to-compute assessments for 5 different ceiling values, all at once. Finally, the income values are averaged over an 5-year period. The calculated assessment results, therefore, correspond to a similar 5-year average.

Countries are listed alphabetically in Table 7 below, and results are presented in five columns, each column being headed by the assumed US share (0.24, ..., 0.20). The rows under each US share value show estimates of A and a in the share formula for Rule 4. Each country has values in two rows. The first row gives five assessment amounts in thousands of US dollars corresponding to each column heading for the US share. The second row for each country gives the share of each country's assessment in the total, which is always fixed at $1,248 million. When the US share is fixed at 24%, the Afghan assessment is $115.18 thousand, and this is 0.009 percent of $1,247,977.078 thousand. In Table 6, the Afghan contribution is set approximately at $240 thousand, in 1993 prices (PPP, GDP). Canada, in Table 6, shows values of $31.1 million (market exchange rates, GNP) and 33.87 million (PPP, GDP). In the tabulation of this appendix, Canada's figure, for the US contribution at 24%, is $38.788 million.

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