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The Rawlsian principle and secession-proofness in large heterogeneous societies

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  • LE BRETON, Michel
  • WEBER, Schlomo
  • DREZE, Jacques

Abstract

This paper examines a model of multi-jurisdictional formation considered by Alesina and Spolaore (1997) and Le Breton and Weber (2003), where the distribution of individuals is given by Lebesgue measure over the (finite or infinite) interval. Every jurisdiction chooses a location of a public good and shares the cost of production among its residents. Each individual covers transportation cost to the location of the public good, and contributes towards the production of the public good. We consider a notion of a secession-proof allocation where no group of individuals can make all its members better off by choosing both a location of the public good and a cost-sharing mechanism among its own members. We show that if the society's population is distributed over the real line , the only secession-proof allocation is Rawlsian, which equalizes the utilities of all individuals in the society. In the case of bounded support, we show that there is a degree of approximation to the Rawlsian solution that reconciles the secession-proofness and the weakened Rawlsian principle.

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Bibliographic Info

Paper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number 2004061.

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Date of creation: 00 Sep 2004
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Handle: RePEc:cor:louvco:2004061

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Related research

Keywords: optimal jurisdictions; secession-proofness; rawlsian allocations; effciency;

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References

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  1. Michel Le Breton & Shlomo Weber, 2003. "The Art of Making Everybody Happy: How to Prevent a Secession," IMF Staff Papers, Palgrave Macmillan, vol. 50(3), pages 4.
  2. Alberto Alesina & Enrico Spolaore, 1995. "On the Number and Size of Nations," NBER Working Papers 5050, National Bureau of Economic Research, Inc.
  3. Haimanko, Ori & Le Breton, Michel & Weber, Shlomo, 2004. "Voluntary formation of communities for the provision of public projects," Journal of Economic Theory, Elsevier, vol. 115(1), pages 1-34, March.
  4. Le Breton, Michel & Weber, Shlomo, 2003. "The Art of Making Everybody Happy : How to Prevent a Secession," IDEI Working Papers 164, Institut d'Économie Industrielle (IDEI), Toulouse.
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Cited by:
  1. Bogomolnaia, Anna & Le Breton, Michel & Savvateev, Alexei & Weber, Shlomo, 2006. "Stability under Unanimous Consent, Free Mobility and Core," IDEI Working Papers 413, Institut d'Économie Industrielle (IDEI), Toulouse.
  2. Shlomo Wever & Alexei Savvateev & Michel Le Breton & Anna Bogomolnaia, 2005. "The Egalitarian sharing rule in provision of public goods," Economics Bulletin, AccessEcon, vol. 8(11), pages 1-5.

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