Combining Rights and Welfarism: a new approach to intertemporal evaluation of social alternatives
AbstractWe propose a new criterion which reflects both the concern for welfare (utility) and the concern for rights in the evaluation of economic development paths. The concern for rights is captured by a pre-ordering over combinations of thresholds (floors or ceilings on various quantitative indicators) that serve as constraints on actions and on levels of state variables. These thresholds are interpreted as minimal rights to be guaranteed to all generations. They are endogenously chosen within the set of all feasible thresholds, accounting for the "cost in terms of welfare" of achieving these rights. We apply the criterion to several examples, including the standard Dasgupta-Heal-Solow model of resource extraction and capital accumulation. We show that if the weight given to rights in the criterion is sufficiently high, the optimal solution may be on the threshold possibility frontier. The development path is then "driven" by the rights. In particular, if a minimal consumption is considered as a right, constant consumption can be optimal even with a positive utility discount rate. The shadow prices of thresholds play an important role in the determination of the rate of discount to be applied to social investment projects.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University of Paris West - Nanterre la Défense, EconomiX in its series EconomiX Working Papers with number 2012-14.
Length: 43 pages
Date of creation: 2012
Date of revision:
Rights; Intergenerational Equity; Welfare; Sustainability;
Other versions of this item:
- Ngo Van Long & Vincent Martinet, 2012. "Combining Rights and Welfarism: A New Approach to Intertemporal Evaluation of Social Alternatives," CESifo Working Paper Series 3746, CESifo Group Munich.
- Ngo Van Long & Vincent Martinet, 2012. "Combining Rights and Welfarism: A New Approach to Intertemporal Evaluation of Social Alternatives," Cahiers de recherche 01-2012, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate
- Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
This paper has been announced in the following NEP Reports:
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.:
- Geir Asheim & Stéphane Zuber, 2013.
"A complete and strongly anonymous leximin relation on infinite streams,"
Social Choice and Welfare,
Springer, vol. 41(4), pages 819-834, October.
- Geir B. Asheim & Stéphane Zuber, 2011. "A Complete and Strongly Anonymous Leximin Relation on Infinite Streams," CESifo Working Paper Series 3578, CESifo Group Munich.
- Gaertner, Wulf & Pattanaik, Prasanta K & Suzumura, Kotaro, 1992.
"Individual Rights Revisited,"
London School of Economics and Political Science, vol. 59(234), pages 161-77, May.
- Kenneth Stollery, 1998. "Constant Utility Paths and Irreversible Global Warming," Canadian Journal of Economics, Canadian Economics Association, vol. 31(3), pages 730-742, August.
- Suzumura, Kotaro & Yoshihara, Naoki, 2006.
"On Initial Conferment of Individual Rights,"
Discussion Paper Series
a478, Institute of Economic Research, Hitotsubashi University.
- Chichilnisky, Graciela, 1995.
"An axiomatic approach to sustainable development,"
8609, University Library of Munich, Germany.
- Chichilnisky, Graciela & Heal, Geoffrey & Beltratti, Andrea, 1995. "The Green Golden Rule," Economics Letters, Elsevier, vol. 49(2), pages 175-179, August.
- Sugden, Robert, 1985. "Liberty, Preference, and Choice," Economics and Philosophy, Cambridge University Press, vol. 1(02), pages 213-229, October.
- Sen, Amartya Kumar, 1970. "The Impossibility of a Paretian Liberal," Scholarly Articles 3612779, Harvard University Department of Economics.
- Long, Ngo Van, 1979. "Two Theorems on Generalized Diminishing Returns and Their Applications to Economic Analysis," The Economic Record, The Economic Society of Australia, vol. 55(148), pages 58-63, March.
- ALVAREZ-CUADRADO, Francisco & LONG, Ngo Van, 2007.
"A Mixed Bentham-Rawls Criterion for Intergenerational Equity : Theory and Implications,"
Cahiers de recherche
06-2007, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
- Alvarez-Cuadrado, Francisco & Van Long, Ngo, 2009. "A mixed Bentham-Rawls criterion for intergenerational equity: Theory and implications," Journal of Environmental Economics and Management, Elsevier, vol. 58(2), pages 154-168, September.
- Francisco Alvarez-Cuadrado & Ngo Van Long, 2007. "A Mixed Bentham-Rawls Criterion For Intergenerational Equity: Theory And Implications," Departmental Working Papers 2007-03, McGill University, Department of Economics.
- Léonard,Daniel & Long,Ngo van, 1992.
"Optimal Control Theory and Static Optimization in Economics,"
Cambridge University Press, number 9780521331586, Fall.
- Léonard,Daniel & Long,Ngo van, 1992. "Optimal Control Theory and Static Optimization in Economics," Cambridge Books, Cambridge University Press, number 9780521337465, Fall.
- repec:hal:cesptp:halshs-00547282 is not listed on IDEAS
- Antoine d'Autume & John M. Hartwick & Katheline Schubert, 2009.
"The zero discounting and maximin optimal paths in a simple model of global warming,"
Documents de travail du Centre d'Economie de la Sorbonne
09013, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
- d'Autume, Antoine & Hartwick, John M. & Schubert, Katheline, 2010. "The zero discounting and maximin optimal paths in a simple model of global warming," Mathematical Social Sciences, Elsevier, vol. 59(2), pages 193-207, March.
- Vincent Martinet & Luc Doyen, 2007.
"Sustainability of an economy with an exhaustible resource: A viable control approach,"
22177, Institut National de la Recherche Agronomique, France.
- Martinet, V. & Doyen, L., 2007. "Sustainability of an economy with an exhaustible resource: A viable control approach," Resource and Energy Economics, Elsevier, vol. 29(1), pages 17-39, January.
- Sen, Amartya, 1970. "The Impossibility of a Paretian Liberal," Journal of Political Economy, University of Chicago Press, vol. 78(1), pages 152-57, Jan.-Feb..
- Kotaro Suzumura, 2005. "An interview with Paul Samuelson: welfare economics, “old” and “new”, and social choice theory," Social Choice and Welfare, Springer, vol. 25(2), pages 327-356, December.
- Ujjayant Chakravorty & Michel Moreaux & Mabel Tidball, 2008.
"Ordering the Extraction of Polluting Nonrenewable Resources,"
American Economic Review,
American Economic Association, vol. 98(3), pages 1128-44, June.
- CHAKRAVORTY Ujjayant & MOREAUX Michel & TIDBALL Mabel, 2006. "Ordering the Extraction of Polluting Nonrenewable Resources," LERNA Working Papers 06.19.212, LERNA, University of Toulouse.
- Chakravorty, Ujjayant & Moreaux, Michel & Tidball, Mabel, 2006. "Ordering the Extraction of Polluting Nonrenewable Resources," IDEI Working Papers 415, Institut d'Économie Industrielle (IDEI), Toulouse.
- Sen, Amartya K, 1976. "Liberty, Unanimity and Rights," Economica, London School of Economics and Political Science, vol. 43(171), pages 217-45, August.
- Martinet, Vincent, 2011. "A characterization of sustainability with indicators," Journal of Environmental Economics and Management, Elsevier, vol. 61(2), pages 183-197, March.
- Volker Grossmann & Thomas Steger & Timo Trimborn, 2011.
"The Macroeconomics of TANSTAAFL,"
CESifo Working Paper Series
3651, CESifo Group Munich.
- Grossmann, Volker & Steger, Thomas M. & Trimborn, Timo, 2011. "The Macroeconomics of TANSTAAFL," Hannover Economic Papers (HEP) dp-482, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
- Grossmann, Volker & Steger, Thomas M. & Trimborn, Timo, 2011. "The macroeconomics of TANSTAAFL," Working Papers 101, University of Leipzig, Faculty of Economics and Management Science.
- Volker Grossmann & Thomas M. Steger & Timo Trimborn, 2012. "The Macroeconomics of TANSTAAFL," DEGIT Conference Papers c017_041, DEGIT, Dynamics, Economic Growth, and International Trade.
- Thomas Michielsen, 2013. "Environmental Catastrophes under Time-Inconsistent Preferences," Working Papers 2013.55, Fondazione Eni Enrico Mattei.
- Michielsen, T.O., 2013. "Environmental Catastrophes Under Time-inconsistent Preferences," Discussion Paper 2013-013, Tilburg University, Center for Economic Research.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Valérie Mignon).
If references are entirely missing, you can add them using this form.