Theory Of Public Goods Research Articles

China's Fiscal Decentralization and Regional Economic Growth

The present paper applies Lucas’s theory of endogenous growth and Stiglitz’s theory of local public goods to build an econometric model consisting of five simultaneous equations to study China’s fiscal decentralization effects on regional economic growth. The model is estimated by two-stage least squares using a set of panel data on 31 Chinese provinces during 1996–2005. The estimated results show that China’s fiscal decentralization increased the local governments’ expenditure on physical infrastructure and education, which led to the rising local physical capital stock and human capital levels, respectively, and then resulted in the growth of regional economies.

Religious freedom and objectives for economic intercultural development

Text, accepted by the Director, of the report presented at the International Consultation on Religious Freedom Research (Istanbul on 17 March 2013), supervised by Prof. Antonio Fuccillo. This text was admitted after being assessed by the members of the evaluation scientific committee of the International Institute of Religious Freedom. SUMMARY: 1. The theory of public goods: religious freedom as a public good – 2. Economics and religion: the reasons for the need of intercultural relationship – 3. Religious factors and asymmetric information in economics – 4. Ethical development, religion and the cross-cultural domain – 5. Financial choices and religious factors – 6. Concluding remarks.

Remembering Vincent Ostrom: unhorsing a dominant paradigm

This essay is a memorial piece about Vincent Ostrom (September 25, 1919–June 29, 2012). I start by reviewing his academic history and then turn to Professor Ostrom’s major intellectual legacy—his effort to overturn the dominant paradigm in public administration and political science on metropolitan government reform. The three most important contributions of his work are discussed, including the introduction of public goods theory into the study of public administration and his work on quasimarkets and the Tiebout model. Three controversies or conundrums raised by his work are then discussed. Finally, the essay considers whether Professor Ostrom was ultimately successful in his effort to overthrow the traditional approach to the production and delivery of public goods at the city government level.

Kamu malları: piyasa başarısızlığı mı teorilerin başarısızlığı mı?

Public goods are generally perceived as market failure and consequently are thought to be subject to public intervention. However, when mainstream theories are closely examined, one can see that there is no consensus on the characteristics of public goods that would justify public provision, hence there are many objections to the public provision of such goods. The main thesis of this study is that the concept of public goods is inadequate to describe the publicness of goods, and corresponding theories also fail to clearly explain even what they themselves theoretically devised. To investigate this thesis, it is examined whether public goods theory has a satisfactory explanation about publicness of goods as well as optimal provision, collective decision making processes and market failure. These are comparatively studied by the views of main economic schools of thought that contribute to the theory of public goods - traditional neoclassical economics, public choice school and new institutionalist economics. Finally, the basis common to all these theories are critically evaluated.

Public Goods and Government Action

It is widely agreed that one of the core functions of government is to supply public goods that markets either fail to provide or cannot provide efficiently. I will suggest that arguments for government provision of public goods require fundamental moral judgments in addition to the usual economic considerations about the relative efficacy of markets and governments in supplying them. While philosophers and policymakers owe a debt of gratitude to economists for developing the theory of public goods, the link between public goods and public policy cannot be forged without moral reflection on the proper function and scope of government power.

Sorting Charles Tiebout: The Construction and Stabilization of Postwar Public Good Theory

A substantial and diverse literature in economics traces its intellectual roots to Charles Tiebout’s 1956 article, “The Pure Theory of Local Expenditure.” Its present recognition, frequently attributed to originating the idea of “voting with your feet,” however, contrasts sharply with its obscurity during Tiebout’s academic career, which was tragically cut short by his passing in 1968. Penned as a qualification to Paul Samuelson’s “pure theory,” the article failed to influence the stabilization of postwar public good theory, despite Tiebout’s engagement with key figures in its construction. Moreover, his death preceded the application of its central mechanism to public, urban, and environmental topics via hedonic, sorting, and computational general equilibrium models. Viewed in this way, the history of Tiebout’s article, and thereby the history of public economics, has remarkably little to do with Tiebout himself. In consequence, this paper seeks to re-personalize and contextualize Tiebout’s scientific work. Professionally, Tiebout (1956) reflected Tiebout’s lifelong interest in issues of local economies and governance. The social and political context of urban sprawl and political fragmentation that accompanied the rapid growth of metropolitan areas, such as Chicago, Los Angeles, and Seattle, raised novel questions in local public finance for researchers before a knowledge community existed to credit their work. For Tiebout, it stimulated his collaboration with Vincent Ostrom and Robert Warren and later involvement in the interdisciplinary field of regional science.

Trading public goods stabilizes interspecific mutualism

The existence of cooperation between species raises a fundamental problem for evolutionary theory. Why provide costly services to another species if the feedback of this provision also happens to benefit intra-specific competitors that provide no service? Rewarding cooperators and punishing defectors can help maintain mutualism; this is not possible, however, when one can only respond to the collective action of one's partners, which is likely to be the case in many common symbioses. We show how the theory of public goods can explain the stability of mutualism when discrimination between cooperators and defectors is not possible: if two groups of individuals trade goods that are non-linear, increasing functions of the number of contributions, their mutualistic interaction is maintained by the exchange of these public goods, even when it is not possible to punish defectors, which can persist at relatively high frequencies. This provides a theoretical justification and testable predictions for the evolution of mutualism in the absence of discrimination mechanisms.

Decentralization and regional government size in Spain

The aim of this paper is to investigate the impact of fiscal decentralization on the size of regional governments in Spain, by controlling for economies of scale, interregional heterogeneity and institutional framework. We study it over 1985 to 2004 using a panel dataset of seventeen spanish regions. The results can be easily summarized. Firstly, it supports the classic public goods theory of a trade-off-between the economic benefits of size and the costs of heterogeneity. Secondly, it doesn’t reject the “Leviathan” hypothesis and neither does the “common pool” hypothesis. Thirdly, by contrast, the paper partly rejects the “Wallis’” hypothesis. It argues that government size is mediated by financial resources obtained through intergovernmental grants, consistent with welfare economics and positive economic policies. We conclude that later advances in the decentralisation process must be compatible with the goal of reducing fiscal imbalances that emanate from the vertical structure of fiscal power.

Mini-Symposium on Multilevel Governance of Interdependent Public Goods * Introduction and Overview: A Research Agenda for Making 'Global Public Goods Theory' More Policy Relevant

This symposium summarizes the main conclusions of an interdisciplinary conference on Multilevel Governance of Interdependent Public Goods at the European University Institute, Florence, in Spring 2011 and reproduces 4 of the altogether 15 conference papers. -super-1 This 'Introduction' identifies areas where global public goods theories need further research. The 'keynote speech' by WTO Director-General Pascal Lamy gives a unique policy perspective on 'Global Governance: From Theory to Practice'. Inge Kaul's paper on 'Global Public Goods Theory: Explaining the Underprovision of International Public Goods and Corrective Strategies' offers a summary--by one of the leading researchers on public goods theory--of the main 'collective action problems' impeding multilevel governance of interdependent public goods. 'The G-20 and Global Economic Governance: Lessons from Multilevel European Governance?', by Jan Wouters and Thomas Ramopoulos, discusses the policy question of whether reforms of the G-20 meetings can and should be inspired by European experiences of multilevel governance. Daniel Esty and Anthony Moffa explore 'Why Climate Change Collective Action has Failed and What Needs to be Done Within and Without the Trade Regime'. One major conclusion of the symposium is that economic and political 'public goods theories' neglect law and constitutionalism as instruments for producing 'aggregate public goods'. Remedying this neglect requires integrating legal and constitutional theories into public goods research. Reconciling, on the one hand, the power-oriented 'ethos of diplomats' focus on promotion of 'national interests' through 'rule by law' with, on the other hand, the justice-oriented 'ethos of constitutional democracies' focus on cosmopolitan rights protecting individual and democratic self-development through 'rule of law' remains the biggest challenge in protecting international 'aggregate public goods' in the 21st century. The Author 2012. Published by Oxford University Press. All rights reserved., Oxford University Press.

Economics Analysis of Agricultural Environment Protection

Based on the theory of public goods, externality theory, and theory of property rights, the paper gives an economics analysis of agricultural environment protection, and raises the economic ways of agricultural environmental protection.

On strong independence of allocative efficiency from distribution in the theory of public goods

We extend Bergstrom and Cornes (1983) to show that for strong independence of efficient allocations from distribution in a public goods economy, the utility functions of all consumers must identically be of the form: A(Y)Xi, where Y and Xi are respectively the quantities of public good and private good for consumer i, and A(⋅) is some arbitrary function. This implies that for an economy with heterogeneous consumer preferences, it is impossible to ensure that any redistribution of private goods will remain efficient, especially for boundary Pareto optima.

Some Remarks on Preference Revelation for Public Goods

This paper questions the long-established view in the Musgrave-Samuelson public goods theory about voters’ incentives to misrepresent their preferences for public goods. The arguments are structured as follows: The concept of‘democracy’ as ‘government by the people’ presupposes that voters freely express their own views in order to influence government's decisions; the idea of governments introducing demand-revealing mechanisms to detect people's ‘true’ preferences seems inconsistent with this view. Voters’ disclosure of their preferences typically is not immediately related to their tax obligations, whose enforcement takes place after approval of the budget, which makes unprofitable any strategic behavior by the voters. From an historic viewpoint, the ‘preference revelation problem’ for public goods goes back to Wicksell's essay on «A New Principle of Just Taxation» and, through Musgrave, it was conveyed to Samuelson. However, the Wicksellian statement was based on an incorrect interpretation of Mazzola's theory.

On a Notion of Similarity with Endowments in Public Economics

We establish that a novel notion of similarity with endowments by Shitovitz and Spiegel (1998) amounts to severe functional form restrictions, and these restrictions on utility functions can be determined by functional equation methods. The resulting functional forms are related to the familiar Cobb-Douglas and quasi-linear forms, as well as the classical result of Bergstrom and Cornes (1983) on the independence of allocative efficiency from distribution in the theory of public goods.

Public goods, environmental quality and the EKC – the 'unsaid' of the intensity of use indices

The environmental Kuznets curve and the green convergence hypotheses postulate that economic growth and pollution may be decoupled. Their validity has been questioned from several perspectives. This study addresses, from the particular viewpoint of an economist, an additional (though obvious) issue that should be considered when dealing with the validation of these hypotheses, i.e. the public nature of environmental quality. Building on the theory of public goods, it cautions against the ‘uncritical’ utilisation of the intensity of use indices, which may lead to erroneous conclusions about the sustainability of an economy. It presents a review of the findings based on the intensity of use indices and demonstrates that, together with environmental reasons, there are economic grounds to warn against their utilisation. It also provides empirical evidence to show that improvement in the intensity of use indices does not necessarily imply better environmental quality.

湿地资源保护经济学分析——以北京野鸭湖湿地为例

湿地资源保护是全球生态保护的核心问题之一。在分析湿地资源保护的经济属性的基础上,以北京市野鸭湖湿地为案例,运用经济学的理论和方法以及清晰的图表重点分析了野鸭湖湿地资源保护过程中的外部性以及资源利用中成本与收益两个问题。研究结果表明:(1)从正外部性分析,个人收益小于社会收益,个人保护的湿地资源小于社会最优量,会造成湿地资源保护的不足;从负外部性分析,个人成本小于社会成本,个人对湿地资源的利用水平大于社会最优利用水平,造成湿地资源的过度利用;(2)根据湿地资源利用的成本收益分析结果,"搭便车"行为会造成湿地资源的退化甚至恶化;(3)明晰产权有利于湿地资源配置效率的提高。研究结果可以为中国湿地保护过程中出现的资源利用矛盾提供有益的借鉴,特别是为保护北京野鸭湖湿地提供理论支撑和政策建议。;A wetland ecosystem is one of the most important ecosystems on earth. It plays important roles in ecological balances and provides human beings with products such as food, water and entertainment. Therefore, wetland resource conservation is one of the key issues in global ecological environment protection. Based on the analysis of economic attributes of wetland resource conservation and the theories of property rights, public goods and externality, this research, taking the Beijing Wild Duck Lake (BWDL) wetland as an example, emphatically analyzed (1) the externality in the processes of BWDL resource protection and (2) the costs and the profits in the BWDL resource utilization. The results show: (1) Individual profits may not be compensated due to positive externality, which leads to the deficiency of resources during the wetland protection. We hold that a reasonable compensation mechanism should be built in order to compensate the people who participate in the protection of wetlands. Only when their individual profits were safeguarded then can the social optimal point be achieved. In addition, people who destroy wetland resources may not be punished due to negative externality. If there is no valid constraint mechanism for these behaviors of destroying wetland resources, deterioration of wetland resources cannot be avoided. Hence, in the view of externality theory, the primary reason caused the wetland deterioration is the lack of compensation and constraint mechanism of positive and negative externality. (2) Free riding will lead to the deterioration of wetland resources. Taking cage fish culture in the BWDL as an example, we analyzed the negative effect from free riding. Results show that free riding existed in the utilization of wetland resources, resulting in the excessive use of wetland resources. Once the carrying capacity of local wetland ecosystems was broken, wetland resources will deteriorate further. Hence, one of the most challenges facing by wetland resources protection is how to coordinate the contradiction between cost and benefit during the protection and utilization of wetland resources. (3) A clear property rights is good for wetland resources protection. Free riding and externality are, fundamentally, results of unclear property rights of wetland resources. In China, most of natural resources with characteristics of public goods belong to two types: state or collective ownership. The allocation efficient of wetland resources will be low under the condition of unclear property rights. Individual person who protect wetland resources cannot get expect revenue. Converting the operation right and revenue right to individual may be a good way to solve the above problems. Individual is response for cost and benefit during the utilization of wetland resources. The allocation efficient will be improved and market failure can thus be avoided. Thereafter, administers of wetlands should define behaviors and reasonability of damage behaviors of wetland resources. Meanwhile, they should also make clear about the right and responsibility of wetland resource users. These research results would provide references for the problems in wetland protection processes in our country. In particular, it can provide scientific basis and policy options in the BWDL wetland conservation.

Economic game theory for mutualism and cooperation

We review recent work at the interface of economic game theory and evolutionary biology that provides new insights into the evolution of partner choice, host sanctions, partner fidelity feedback and public goods. (1) The theory of games with asymmetrical information shows that the right incentives allow hosts to screen-out parasites and screen-in mutualists, explaining successful partner choice in the absence of signalling. Applications range from ant-plants to microbiomes. (2) Contract theory distinguishes two longstanding but weakly differentiated explanations of host response to defectors: host sanctions and partner fidelity feedback. Host traits that selectively punish misbehaving symbionts are parsimoniously interpreted as pre-adaptations. Yucca-moth and legume-rhizobia mutualisms are argued to be examples of partner fidelity feedback. (3) The theory of public goods shows that cooperation in multi-player interactions can evolve in the absence of assortment, in one-shot social dilemmas among non-kin. Applications include alarm calls in vertebrates and exoenzymes in microbes.

Earth observation and the public good

The term ‘public good’ is often used in satellite Earth observation to indicate that Earth observation data are of value or interest to the public. In fact, the term ‘public good’ has a more specific meaning, originating in the discipline of Economics, which carries with it a set of assumptions and implications about how markets operate. In this context a public good has two main characteristics: non-rivalry and non-excludability. In their most common digital format, Earth observation data can appear to be both non-rivalrous and non-excludable. However, it is not the digital medium itself which controls the ‘publicness’ of a good but the conditions of access to that good. This paper explores the meaning of the concept of public goods in an Earth observation context by, first, examining public good theory and related concepts of categories of goods and, second, applying the concepts to nine Earth observation missions, programmes and data.

Nový pohled na teorii veřejných statků

Nový pohled na teorii veřejných statků

The evolution of antisocial punishment in optional public goods games.

Cooperation, where one individual incurs a cost to help another, is a fundamental building block of the natural world and human society. It has been suggested that costly punishment can promote the evolution of cooperation, with the threat of punishment deterring free-riders. Recent experiments, however, have revealed the existence of 'antisocial' punishment, where non-cooperators punish cooperators. While various theoretical models find that punishment can promote the evolution of cooperation, these models a priori exclude the possibility of antisocial punishment. Here we extend the standard theory of optional public goods games to include the full set of punishment strategies. We find that punishment no longer increases cooperation, and that selection favours substantial levels of antisocial punishment for a wide range of parameters. Furthermore, we conduct behavioural experiments, showing results consistent with our model predictions. As opposed to an altruistic act that promotes cooperation, punishment is mostly a self-interested tool for protecting oneself against potential competitors.

Review: Game theory of public goods in one-shot social dilemmas without assortment

We review the theory of public goods in biology. In the N-person prisoner's dilemma, where the public good is a linear function of the individual contributions, cooperation requires some form of assortment, for example due to kin discrimination, population viscosity or repeated interactions. In most social species ranging from bacteria to humans, however, public goods are usually a non-linear function of the contributions, which makes cooperation possible without assortment. More specifically, a polymorphic state can be stable in which cooperators and non-cooperators coexist. The existence of mixed equilibria in public goods games is a fundamental result in the study of cooperation that has been overlooked so far, because of the disproportionate attention given to the two- and N-person prisoner's dilemma. Methods and results from games with pairwise interactions or linear benefits cannot, in general, be extended to the analysis of public goods. Game theory helps explain the production of public goods in one-shot, N-person interactions without assortment, it leads to predictions that can be easily tested and allows a prescriptive approach to cooperation.