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Equity as a Prerequisite for Stability of Cooperation on Global Public Good Provision

Wolfgang Buchholz (), Alexander Haupt () and Wolfgang Peters ()
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Wolfgang Peters: Faculty of Business Administration and Economics, European University Viadrina, Frankfurt (Oder)

No 16, Discussion Paper Series RECAP15 from RECAP15, European University Viadrina, Frankfurt (Oder)

Abstract: In this paper, we explore the relationship between an equitable distribution of the cost shares in cooperative public good provision and the core property of Pareto-optimal allocations. Core allocations do not only fulfil an important stability condition but are also the only promising candidates for efficient public good allocations that are acceptable to all parties in a negotiation process. In particular, our analysis shows that it is an unequal distribution of costs that motivates a coalition of countries to stand alone and to block an initially given Pareto-optimal allocation. In our approach, distributional equity of individual public good contributions is assessed by a specif-ic sacrifice measure (the “Moulin sacrifice”), which is derived from the egalitarian-equivalent concept suggested by Moulin (1987).

Date: 2014-11
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https://www.europa-uni.de/de/forschung/institut/re ... ds/recap15_DP016.pdf First version, 2014 (application/pdf)

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Journal Article: Equity as a Prerequisite for Stability of Cooperation on Global Public Good Provision (2016) Downloads
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