Justice, inclusion, and incentives

Ghislain Herman Demeze-Jouatsa, Roland Pongou and Jean-Baptiste Tondji
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Ghislain Herman Demeze-Jouatsa: Stylink Gmbh, Münster, Germany
Jean-Baptiste Tondji: University of Texas Rio Grande Valley, Robert C. Vackar College of Business and Entrepreneurship, Edinburg, TX, USA

Journal of Theoretical Politics, 2024, vol. 36, issue 2, 101-131

Abstract: How does justice affect individual incentives and efficiency in a political economy? We show that elementary principles of distributive justice guarantee the existence of a self-enforcing contract whereby agents non-cooperatively choose their inputs and derive utility from their pay. Chief among these principles is that your pay should not depend on your name, and a more productive individual should not earn less. We generalize our analysis to incorporate inclusivity, ensuring basic pay to unproductive agents, implemented through progressive taxation and redistribution. Our findings show that without redistribution, any self-enforcing agreement may be inefficient, but a minimal level of redistribution guarantees the existence of an efficient agreement. Our model has several applications and interpretations. In addition to highlighting the structure of economies and organizations in which fairness and efficiency are compatible, we develop an application to the formation of rent-seeking political alliances under the threat of fake news.

Keywords: Justice; incentives; self-enforcing contract; efficiency; political alliances (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:jothpo:v:36:y:2024:i:2:p:101-131

DOI: 10.1177/09516298241233491

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