Abstract
We consider the problem of producing an impure public good in various jurisdictions formed through the strategic decisions of agents. Our environment inherits two well-known problems: (i) Under individual decisions, there is a tension between stability and efficiency; (ii) Under coalitional decisions, stable jurisdiction structures may fail to exist. The solution, we propose is the use of membership property rights: When a move among jurisdictions is subject to the approval of the agents whom it affects, coalitionally stable jurisdiction structures coincide with those which are efficient.
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