Public Goods Research Articles

‘The assisting hand’ or ‘the grabbing hand’: experimental evidence from PPP investments in the implementation of official rotation systems

In the context of uneven and insufficient social development, examining the relationship between the official rotation system and the quality of government services offers an effective guide to addressing government misconduct and reducing wealth disparities. This study employs a public goods game experiment to simulate the investment scenario of Public-Private Partnership (PPP) projects, focusing on three pivotal questions: Firstly, do the ‘assisting hand’ and the ‘grabbing hand’ of officials differ between developed and underdeveloped regions? Secondly, can the interregional rotation system enhance the ‘assisting hand’ and weaken the ‘grabbing hand’ in both areas? Lastly, can political tournaments more effectively alleviate the issue of ‘government misconduct’? The experimental results reveal: Firstly, low economic growth potential limits the ‘assisting hand’ of officials while fostering the ‘grabbing hand’; secondly, the interregional rotation system strengthens the ‘assisting hand’ in underdeveloped areas but weakens it in developed regions; finally, compared to the interregional rotation system, the tournament system reinforces the ‘assisting hand’ in developed regions. These findings provide micro-level insights into the relationship between official behavior and regional characteristics, and offer significant implications for the reform of governance policies.

Critical mass in a crowd: A predictive model of online crowdfunding of public goods in the U.S. vs. U.K

Research on differences in public goods crowdfunding donation behavior among top-performing markets is scarce, particularly among countries that are often considered culturally similar overall but have differences that may affect crowdfunding donation behavior (e.g., the U.S. and U.K.). With addressing this gap in mind, we calculate the “critical mass” numbers for both markets using scraped data from major crowdfunding sites and advanced econometrics and analytics techniques. While fewer contributors are required for a U.S. crowdfunding campaign to “take off,” U.S. contributions decrease afterward. Meanwhile, U.K. participants follow the opposite pattern, contributing at a slower yet steadier pace over time, with more successful campaigns long term. Further, lower (higher) information efficiency leads to lower critical mass numbers, lower duration, and more donors for the U.S. (U.K.). The findings contribute to the literature on global crowdfunding by characterizing idiosyncrasies of the top two crowdfunding markets in donation behavior toward public goods campaigns.

Effectively Utilizing Infrastructure to Achieve Economic and Societal Growth in Developing Countries

Developing countries can benefit economically and socially from the construction of infrastructure. However, poor policy decisions regarding investment in public goods and services often impede infrastructure’s effectiveness in achieving such benefits. This paper seeks to provide a coherent framework for developing countries to consider when planning and implementing infrastructure projects. Gathering insights and policy suggestions from various relevant studies, it proposes three factors necessary for developing countries to consider. These three factors emphasize individual quality of life and long-term development instead of simple short-term economic growth described by basic economic indicators. They also account for the social and environmental concerns or implications of infrastructure construction, often overlooked in many policy agendas. The first factor is the efficiency of expenditure and accessibility of infrastructure, achieved through the consideration of diminishing returns to scale for capital investment and an emphasis on the delivery, not just the provision, of public services; the second is resilience and sustainability in the context of local environmental attributes and regional independence during the decision-making process; the third is the maximization of indirect benefits, most notably the increases in human capital and productivity caused by infrastructure construction.

Flexible compliance: utility and legitimacy in Jerusalem

ABSTRACT Disadvantaged residents in contested cities often mistrust and resist official authorities due to historical deprivation. However, their urgent needs compel them to approach municipal bodies, both formally and informally, exhibiting ‘flexible compliance’. Through interviews with Palestinians and a public opinion survey in Jerusalem, we analysed the preferences of Jewish-Israeli and Palestinian residents for public goods provision. Results indicate that Palestinian residents prefer unofficial institutions, but this varies by location. Inner-city and outer-city East Jerusalem residents prefer the municipal government, while those beyond the separation wall favour the community councils. We elucidate flexible compliance and propose municipal tools to address it.

Spatial analysis of technical efficiency in the provision of local public goods: The case of Chilean mining municipalities

Spatial analysis of technical efficiency in the provision of local public goods: The case of Chilean mining municipalities

Does Increasing the Supply of International Public Goods Reduce the Risk of WTO Complaints Against Member States?

Does Increasing the Supply of International Public Goods Reduce the Risk of WTO Complaints Against Member States?

Accessibility of Pareto optima

Non-tâtonnement processes and planning procedures have been defined in different economic contexts, as dynamic processes to reach efficient allocations, with or without price adjustment, satisfying the property that, along the process, the utility of every agent is non-decreasing and transactions can occur, thus making a clear distinction with the study of tâtonnement processes whose goal is to reach competitive equilibria with transactions occurring only at equilibrium.In this paper, we provide sufficient conditions guaranteeing that every Pareto optimum which is preferred or indifferent to some given initial situation by every agent is accessible by a monotone efficient dynamic process. The framework considered is general enough to encompass the accessibility of Pareto optima by a non-tâtonnement barter process in an exchange economy, the neutrality of the MDP procedure in an economy with public goods, and other types of planning procedures.

Analyzing the impact of tax-based vs. rent-based funding on the effectiveness of environmental protection policies

The necessity of government intervention, particularly through public spending, to address market failure in providing public goods like environmental quality is widely recognized. However, the effectiveness of fiscal environmental policies in improving the environment remains unclear. This paper aims to explore the impact of funding sources for government expenditures on environmental quality. Using a Ramsey growth model, we investigate the consequences of two alternative funding sources for environmental protection: Taxes and natural resources rents. The model highlights that along the balanced growth path, financing environmental spending through taxes enhances environmental quality, while funding from natural resources rents leads to its deterioration. Furthermore, the model emphasizes the crucial role of socio-political institutions governing the economy in understanding the link between environmental protection expenditures and environmental outcomes. To test the model's propositions, we utilize a panel dataset of 76 countries spanning from 1995 to 2018. Our empirical findings corroborate the notion that the funding sources of environmental protection expenditures significantly impact environmental outcomes. Additionally, the results indicate that higher institutional quality, such as greater state capacity, enhances the effectiveness of the government's environmental spending in improving environmental quality. Our findings offer valuable insights for policymakers and researchers seeking to design effective strategies for environmental preservation and sustainable growth.

Unfair competition in public procurement related to intellectual property rights

The article examines the advantages and risks of using the negotiation procedure forpublic procurement of goods, works, and services that include objects of intellectual propertyrights. An analysis of Ukrainian and EU legislation regarding public procurementthat includes objects of intellectual property law was carried out. The practice of conductingpublic procurement in Ukraine under the negotiated procedure in cases where there isa need to protect intellectual property rights is considered. It was concluded that there aredifficulties in understanding and, accordingly, in the practice of applying the provisions ofthe legislation regarding the application of the negotiation procedure for public procurementof goods, works, and services that include objects of intellectual property rights. Imperfectlegislation on public procurement with regard to objects of intellectual propertyrights leads to unfair competition in the form of rights abuse. It is proposed to specify inthe legislation of Ukraine the cases in which the negotiation procedure can be applied tothe public procurement regarding objects of intellectual property rights and to identifyspecific objects of intellectual property rights in relation to which such a procedure can potentiallybe applied. Proposed proposals for supplementing the Law of Ukraine «On PublicProcurement» with the provision of Directive 2014/24/EU that the negotiation procedurefor public procurement related to objects of intellectual property rights is used in exceptionalcases when there is no reasonable alternative or replacement, and the lack of competitionis not the result of artificially narrowing procurement parameters. It was alsoproposed to clarify the provisions of Paragraph 5, Clause 2, Part 2 of Article 40 of the Lawof Ukraine «On Public Procurement» regarding the application of the negotiation procedurefor public procurement that include to objects of intellectual property rights as follows:«if the subject of public procurement is goods, works, or services containing objects ofintellectual property rights» in order to better understand it.

Can we define global collective action problems away?

AbstractThe adoption of the Sustainable Development Goals has rejuvenated an old debate: Can foreign aid be used to finance global public goods (GPGs)? There are those who see aid exclusively as a source of development funding for poor countries. And there are others who are open to answering the question in the affirmative. I put forward five arguments why the latter position is reasonable. Firstly, the formal definition of official development assistance (ODA) cannot be said to exclude its use in financing GPGs as these goods by definition benefit developing countries. Secondly, the amount of ODA provided has never been the gold standard of rich country effort envisaged by some. In particular, the level is boosted by the self‐interests of donors. Thirdly, there is ample precedent for following the benefit principle when it comes to multilateral organisations, which are often seen as GPGs. Fourthly, distinguishing between national public goods and GPGs is not always straightforward as the former are in many cases inputs into the production of the latter, and in such cases, the dividing line between ‘traditional aid’ and ‘funding for GPGs’ is blurred. Finally, it is not obvious in practice that aid as country finance always generates greater welfare gains for developing countries than the provision of GPGs. In sum, being overly normative with respect to what ODA is distracts us from the real problem, namely, that collective action problems result in too little spending on all international public goods, including poverty alleviation in poor countries.

Fiscal policy and deforestation

We investigate the impact of fiscal policy on deforestation in the Brazilian Amazon and Atlantic Forests. We first construct a theoretical dynamic model to examine the effects of government spending and tax revenues on the environment. We then run a VAR model to test the implications of fiscal policies on Brazilian deforestation, using data from June 1998 to May 2022. Our results suggest that government expenditures reduce deforestation in both forests. Moreover, deficit-inducing and balanced-budget fiscal policy shocks have dampening effects on deforestation, with the latter being more effective. This is good news for developing countries like Brazil. They can combat deforestation through fiscal policy in a way that doesn't worsen their fiscal situation. Our findings were unaltered when we considered the effects of a simulated fiscal policy based on spending on public goods only (social assistance, science and technology, defense, education, health, national security, and transportation).

Ecosystem accounting as a component of managing Ukraineʼs recovery on the basis of sustainable development

In the context of global and national goals of sustainable development, the data of the traditional accounting system is not enough to assess the benefits that society receives from ecosystems and their services, as well as the analysis of anthropogenic impact on the natural environment. In this regard, the international communityʼs efforts formed the concept of ecosystem accounting, the data of which characterize the importance of ecosystems for national economies and humanity. The article aims to reveal the conceptual foundations, objects and accounts of ecosystem accounting and identify the factors that determine the need for its implementation as an essential component of managing the recovery of Ukraine based on sustainable development. The research is based on the method of analogy and abstract thinking. The research hypothesis – the feasibility of introducing ecosystem accounting in Ukraine – was proven using the methods of analysis and synthesis, induction, deduction and comparison based on the results of previous studies on the assessment of the effectiveness of ecosystem accounting concepts in some countries and information requests from the government, investors and international partners regarding the state of ecosystems in Ukraine in wartime. The article reveals the principles that are the basis for the development of national concepts of ecosystem accounting. The key objects of ecosystem accounting are ecosystems as a set of assets that form natural capital and ecosystem services, i.e. unique public goods. The structure of ecosystem accounts was presented, accumulating the information necessary to measure natureʼs contribution to the economy and human well-being. This approach allows taking into account the many advantages of nature, which are often not valued in the market in the traditional accounting system and, accordingly, are ignored when making economic decisions. The factors determining the need to develop a national concept of ecosystem accounting and its practical implementation as soon as possible have been identified. The flexibility of the ecosystem accounting concept, which consists of the possibility of forming ecosystem accounts according to the specifics of the countryʼs natural capital, taking international principles as a basis, will allow for an objective assessment of the national wealth and ensure its restoration, rational distribution and accumulation.

Living lab as support for co-creation of value: application to agro-biodiversity contracting solutions

ABSTRACT In addition to providing private goods such as food, fibre and biomass, agriculture can deliver a variety of environmental public goods and ecosystem services, such as biodiversity conservation, water filtering, carbon sequestration, and landscape aesthetics for recreation. Often, however, the use of agricultural landscapes prioritises the provision of private goods, resulting in negative environmental impacts. To address this imbalance in the provision of private and public goods, targeted policy instruments (e.g. contracts) are required to ensure that public goods are provided at the level desired by society. This paper, which is written in the context of the Horizon 2020 project “Contracts 2.0 – H2020 RUR-03-2018”, aims to present a Living Lab case study in Tuscany to point out possible future scenarios of contractual solutions that could provide the right incentives for farmers and land managers to produce a specific environmental public good such as agro-biodiversity. This paper aims to evaluate the application of Living Labs in the case study, assessing what challenges might seriously hinder the collaboration process and/or the success of the participatory approach. Thanks to the participatory approach, it was possible to finalise the “dream contract” in the Living Lab case study. Contract Innovation Labs and Policy Innovation Labs members agreed on a new type of contract based on clear and measurable objectives decided together by farmers and public authorities.

Fiscal Incidence of the Property Tax

We use data from Florida spanning a decade (2010–2019) to empirically revisit the topic of fiscal incidence, the difference between benefits received and taxes paid, as it applies to property taxation. We first estimate demand equations in order to calculate the Lindahl tax share, or price the median voter would be willing to pay for public goods. Our measure of fiscal incidence is the difference between the Lindahl tax share and the actual tax share. With the exception of police and fire expenditures, benefits tend to outweigh costs for those with higher incomes, a pattern we attribute to public goods being valued more by high-income residents who pay a modestly progressive property tax. Controlling for income, Hispanic and black residents have higher levels of fiscal incidence. We explore how policy reforms, including equitable property assessment, affects fiscal incidence.

Spatio-temporal interplay between ecosystem services and urbanization in the Yangtze River Economic Belt: A new perspective for considering the scarcity effect

The expeditious trajectory of urbanization has profound ramifications on the configuration and functioning of the natural milieu. Given the constrained opulence of natural capital and its indispensable bestowal of ecosystem services in different regions, meticulous contemplation of the relationship between urbanization and the ecosystem service scarcity value (ESSV) while formulating decisions is imperative. This study focuses on the Yangtze River Economic Belt (YREB), where ESSV is quantified by combining the dynamic changes in market supply and demand factors. The influence of supply and demand changes on the ESSV is discussed and analyzed in four scenarios. Subsequently, a multidimensional urbanization comprehensive evaluation index system was established to explore the spatiotemporal interactive response mode between ESSV and urbanization. Our findings manifest a notably augmented ESSV in the YREB from 1990 to 2020, particularly prominent between 2000 and 2010. Moreover, the growth in public goods services outpaced that in private goods services within the same period. Demand-driven scarcity has emerged as the foremost determinant of ESSV. Urbanization levels gradually increased from 1990 to 2020, with a uniform allocation of heightened ESSV and urbanization throughout the region. The urbanization level of YREB, as a whole, exhibited conspicuous spatial heterogeneity, with the downstream region significantly surpassing the middle and upper reaches, and the downstream Yangtze River Delta city cluster and the middle reaches of the Chengdu-Chongqing city cluster notably outpacing that in the surrounding region. The coupling coordination degree (CCD) between the ESSV and urbanization in the YREB develops in a harmonious direction during the study period, accompanied by palpable spatial disparities. The area of unbalanced development gradually decreased, and the area proportion of the coordinated development type of ESSV and urbanization increased continuously. Overall, this study elucidates regional disparities in the reciprocal relationship between the ESSV and urbanization in the YREB, thereby unveiling the extent of incongruity between regional urbanization and the ecosystem. It serves to identify the juncture at which ecological sustainability and urbanization converge harmoniously, thus offering novel insights in achieving comprehensive, high-caliber, and synchronized development in the YREB.

Solving the prisoner’s dilemma trap in Hamilton’s model of temporarily formed random groups

Explaining the evolution of cooperation in the strong altruism scenario, where a cooperator does not benefit from her contribution to the public goods, is a challenging problem that requires positive assortment among cooperators (i.e., cooperators must tend to associate with other cooperators) or punishment of defectors. The need for these drastic measures stems from the analysis of a group selection model of temporarily formed random groups introduced by Hamilton nearly fifty years ago to describe the fate of altruistic behavior in a population. Challenging conventional wisdom, we show analytically here that strong altruism evolves in Hamilton’s original model in the case of biparental sexual reproduction. Moreover, when the cost of cooperation is small and the amplified contribution shared by group members is large, cooperation is the only stable strategy in equilibrium. Thus, our results provide a solution to the ‘problem of origination’ of strong altruism, i.e. how cooperation can take off from an initial low frequency of cooperators. We discuss a possible reassessment of cooperation in cases of viral co-infection, as cooperation may even be favored in situations where the prisoner’s dilemma applies.

An exploratory study on supplier acceptance of and engagement in a national tax lottery designed to improve tax compliance

Purpose: To determine business owners’ perceptions of and support for a national tax lottery system in South Africa. Motivation: Tax compliance in developing countries is a challenge for governments, which depend on tax revenue to provide public goods and services. A tax lottery system has been recommended for South Africa, where customers would demand receipts for purchases that serve as lottery tickets and create paper trails that would expose tax non-compliant businesses. Literature indicates that small businesses find the process burdensome, costly, and detrimental to competitiveness and growth, particularly when customers are lost to larger businesses that are better equipped to routinely supply receipts. Design: An exploratory approach, using an online survey of suppliers to gauge their perceptions of a South African tax lottery system was followed. Findings: Of the respondent, 51% expressed support for a tax lottery system, and thus, at an exploratory level, business owners in South Africa do not seem to support a tax lottery. This is an important finding, since suppliers play an integral role in the implementation of a tax lottery system. Further research should be conducted to determine the views of a more representative sample of suppliers, to determine whether they would play their part in administering such a system. Suppliers’ biggest concern was government corruption in implementing such a system. Contribution: This study contributes to the body of knowledge on tax lotteries, particularly from a developing country perspective; furthermore, few empirical studies take the supplier perspective and acceptance of a tax lottery into account.

Do policy instruments that restrict social identity expression increase economic cooperation?

Recent public and corporate policies restricting social identity expression, such as the face-covering restrictions in many European countries, presume that prominent signals of our social identity differences drive division even when inference about social identity is unaffected. Social identity theory predicts that limiting identity expression could positively or negatively affect how groups interact. We use an experiment to test whether a treatment that bans displaying an identity pin affects cooperation in public goods provision. Our subjects are U.K. residents who were in favor of leaving or remaining in the European Union. Each subject is simultaneously in two different yet economically identical environments that are distinguished only by the social identities of the group members. They play two simultaneous one-shot public goods games, one with others who share their identity (in-group public good), and one with a mixture of Leavers and Remainers (mixed-group public good). The political identities of all subjects and the structure of each group are known by everyone. Our treatments vary whether there exists a ban on displaying a Leaver/Remainer identity pin to others and whether Leavers or Remainers are the majority identity in the mixed groups. We find that banning pinning increases contributions to the mixed group when Leavers are the majority. These increases can be explained by changes in beliefs rather than the notion that shared group identity per se affects behavior. These setting- and identity-specific results suggest that policies designed to promote integration should be examined in the context in which they will be applied.

Interrogating the Academy: Higher Education Transformation for the Public Good beyond Diversity in Race and Gender

This article draws on findings from a qualitative study of academics’ role in higher education’s contribution to the public good based on 15 interviews with academics from two universities in South Africa. I argue that if higher education in South Africa is to transform for the public good, the transformation of the university academic staff needs to be taken seriously and move beyond diversity of race and gender. The findings of the study that underpins this article suggest that the attributes of academics must be considered in initiatives that seek to transform the academy. This has implications for meaningful transformation because diversity, in terms of race and gender, does not necessarily translate to transformation in practice. Based on these findings, I suggest what these attributes may be through the concept of “public good academics,” which the academics I interviewed associated with being progressive, reflexive, critically conscious, and socially competent. I conclude that public good academics are aptly positioned to engage in transformational practices. Therefore, the personal attributes of academics do matter and should not be ignored in our thinking and conversations about transformational practices in higher education, especially in South Africa—a country with a history of colonialism and apartheid that has shaped the higher education landscape.

“Public goods, labor supply and benefit taxation”

“Public goods, labor supply and benefit taxation”