Decisions on Public Projects with Negative Externalities: Veil of Ignorance or Impartial Spectator?

Camilla Colombo and Wulf Gaertner

Revue d'économie politique, 2018, vol. 128, issue 2, 251-265

Abstract: There are public projects which many people welcome because they are expected to be beneficial for society at large. On the other hand, however, these projects may generate larger negative externalities for certain parts of society. One example is the erection of a nuclear power-plant, a measure that is widely considered to render a country?s energy provision less dependent on supply from outside. On the other hand, it possibly causes a feeling of insecurity among people who live in the vicinity of such a power station, and can furthermore have negative economic consequences in so far as the price of land and of houses may decline in this area. How should decisions on public projects with larger negative externalities be taken? Assuming that the benefits for all those who are directly or indirectly affected by such a project are roughly the same, a cost-sharing or burden-sharing method is proposed that focuses on a weighted difference between the economic performance of a particular region and the average performance of all regions concerned. The weight is to be determined by an impartial observer.

Keywords: public projects; externalities; veil of ignorance; social choice; cost-sharing scheme (search for similar items in EconPapers)
Date: 2018
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.cairn.info/load_pdf.php?ID_ARTICLE=REDP_282_0251 (application/pdf)
http://www.cairn.info/revue-d-economie-politique-2018-2-page-251.htm (text/html)
free

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cai:repdal:redp_282_0251

Access Statistics for this article

More articles in Revue d'économie politique from Dalloz
Bibliographic data for series maintained by Jean-Baptiste de Vathaire ().