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Inequality, Market Imperfections, and Collective Action Problems

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Author Info
Pranab Bardhan (Department of Economics, University of California, Berkeley)
Maitreesh Ghatak (Department of Economics, University of Chicago)

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Abstract

In this paper we analyze the effects of wealth inequality on the provision of public goods and management of common-property resources (CPR) when there are market imperfections in inputs that are complementary in production to the collective good. We show that for public goods inequality impedes efficiency, while for use of CPRs there is an inverse U-shaped relationship between inequality and efficiency. We discuss the implications of these theoretical results for redistributive policies such as land reform.

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File URL: http://repositories.cdlib.org/cgi/viewcontent.cgi?article=1014&context=iber/cider
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Paper provided by Center for International and Development Economics Research, Institute for Business and Economic Research, UC Berkeley in its series Center for International and Development Economics Research, Working Paper Series with number 1014.

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Date of creation: 01 Sep 1999
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Handle: RePEc:cdl:ciders:1014

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Keywords: public goods; common property resources; inequality;

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Kenneth S. Chan & Stuart Mestelman & R. Andrew Muller, 1998. "Voluntary Provision of Public Goods," McMaster Experimental Economics Laboratory Publications 1998-02, McMaster University. [Downloadable!]
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  2. Cornes, Richard & Sandler, Todd, 1984. "The theory of public goods: non-nash behaviour," Journal of Public Economics, Elsevier, vol. 23(3), pages 367-379, April. [Downloadable!] (restricted)
  3. Baland, J-M & Platteau, J-P, 1997. "Wealth Inequality and Efficiency in the Commons," Papers 193, Notre-Dame de la Paix, Sciences Economiques et Sociales.
  4. Abhijit Banerjee & Paul J. Gertler & Maitreesh Ghatak, 1998. "Empowerment and Efficiency: The Economics of Agrarian Reform," Working papers 98-22, Massachusetts Institute of Technology (MIT), Department of Economics.
  5. Kenneth S, et al Chan, 1996. "The Voluntary Provision of Public Goods under Varying Income Distributions," Canadian Journal of Economics, Canadian Economics Association, vol. 29(1), pages 54-69, February. [Downloadable!] (restricted)
  6. Jeff Dayton-Johnson & Pranab Bardhan, 2002. "Inequality And Conservation On The Local Commons: A Theoretical Exercise," Economic Journal, Royal Economic Society, vol. 112(481), pages 577-602, July. [Downloadable!] (restricted)
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  7. Bernheim, B Douglas, 1986. "On the Voluntary and Involuntary Provision of Public Goods," American Economic Review, American Economic Association, vol. 76(4), pages 789-93, September. [Downloadable!] (restricted)
  8. Alesina, Alberto & Rodrik, Dani, 1994. "Distributive Politics and Economic Growth," The Quarterly Journal of Economics, MIT Press, vol. 109(2), pages 465-90, May. [Downloadable!] (restricted)
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  9. Knack, Stephen & Keefer, Philip, 1997. "Does Social Capital Have an Economic Payoff? A Cross-Country Investigation," The Quarterly Journal of Economics, MIT Press, vol. 112(4), pages 1251-88, November.
  10. Cornes, Richard & Sandler, Todd, 1994. "The comparative static properties of the impure public good model," Journal of Public Economics, Elsevier, vol. 54(3), pages 403-421, July. [Downloadable!] (restricted)
  11. Easter, K. William & Palanisami, K., 1986. "Tank Irrigation In India And Thailand: An Example Of Common Property Resource Management," Staff Papers 13888, University of Minnesota, Department of Applied Economics. [Downloadable!]
  12. Bardhan, Pranab, 1993. "Analytics of the institutions of informal cooperation in rural development," World Development, Elsevier, vol. 21(4), pages 633-639, April. [Downloadable!] (restricted)
  13. Warr, Peter G., 1983. "The private provision of a public good is independent of the distribution of income," Economics Letters, Elsevier, vol. 13(2-3), pages 207-211. [Downloadable!] (restricted)
  14. Jonathan Temple & Paul A. Johnson, 1998. "Social Capability And Economic Growth," The Quarterly Journal of Economics, MIT Press, vol. 113(3), pages 965-990, August. [Downloadable!] (restricted)
  15. Banerjee, Abhijit V & Newman, Andrew F, 1993. "Occupational Choice and the Process of Development," Journal of Political Economy, University of Chicago Press, vol. 101(2), pages 274-98, April. [Downloadable!] (restricted)
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  16. Itaya, Jun-ichi & de Meza, David & Myles, Gareth D., 1997. "In praise of inequality: public good provision and income distribution," Economics Letters, Elsevier, vol. 57(3), pages 289-296, December. [Downloadable!] (restricted)
  17. Tornell, Aaron & Velasco, Andes, 1992. "The Tragedy of the Commons and Economic Growth: Why Does Capital Flow from Poor to Rich Countries?," Journal of Political Economy, University of Chicago Press, vol. 100(6), pages 1208-31, December. [Downloadable!] (restricted)
  18. Bergstrom, Theodore & Blume, Lawrence & Varian, Hal, 1986. "On the private provision of public goods," Journal of Public Economics, Elsevier, vol. 29(1), pages 25-49, February. [Downloadable!] (restricted)
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  19. Benabou, R., 1996. "Inequality and Growth," Working Papers 96-22, C.V. Starr Center for Applied Economics, New York University. [Downloadable!]
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Deininger, Klaus & May, Julian, 2000. "Can there be growth with equity : an initial assessment of land reform in South Africa," Policy Research Working Paper Series 2451, The World Bank. [Downloadable!]
  2. Deininger, Klaus & Jin, Songqing & Nagarajan, Hari K., 2007. "Land reforms, poverty reduction, and economic growth : evidence from India," Policy Research Working Paper Series 4448, The World Bank. [Downloadable!]
    Other versions:
  3. Deininger, Klaus & Jin, Songqing & Yadav, Vandana, 2008. "Impact of Land Reform on Productivity, Land Value and Human Capital Investment: Household Level Evidence from West Bengal," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6277, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
  4. Jeff Dayton-Johnson & Pranab Bardhan, 2002. "Inequality And Conservation On The Local Commons: A Theoretical Exercise," Economic Journal, Royal Economic Society, vol. 112(481), pages 577-602, July. [Downloadable!] (restricted)
    Other versions:
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