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A Mixed Bentham-Rawls Criterion For Intergenerational Equity: Theory And Implications

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Author Info
Francisco Alvarez-Cuadrado ()
Ngo Van Long ()

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Abstract

Ranking development programs using integrals of discounted utilities can yield drastic consequences that offend our sense of justice. New alternative social welfare criteria should be considered. A reaction to discounted utilitarianism is to moderate its effects by adding to the social welfare function a second term that takes seriously the welfare of the generations that live in the far distant future. Chichilnisky proposes a social welfare function that has two desirable properties: (i) non-dictatorship of the present, and (ii) non-dictatorship of the future. However, in many economic models, there exists no optimal path under the Chichilnisky criterion. We introduce a third desideratum: "non-dictatorship of the least advantaged," and propose a new welfare criterion that is morally compelling. It is a weighted average of two terms: (a) the sum of discounted utilities, and (b) the utility level of the least advantaged generation. We derive necessary conditions to characterize growth paths that satisfy our criterion, and show that in some models with familiar dynamic specifications, an optimal path exists and displays appealing characteristics.

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Paper provided by McGill University, Department of Economics in its series Departmental Working Papers with number 2007-03.

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Length: 43 pages
Date of creation: May 2007
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Handle: RePEc:mcl:mclwop:2007-03

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Find related papers by JEL classification:
D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate
O21 - Economic Development, Technological Change, and Growth - - Development Planning and Policy - - - Planning Models; Planning Policy
Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General

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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.:
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    Other versions:
  5. Dasgupta, Partha, 1974. "On some alternative criteria for justice between generations," Journal of Public Economics, Elsevier, vol. 3(4), pages 405-423, November. [Downloadable!] (restricted)
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  7. Charles Figuières & Mabel Tidball, 2006. "Sustainable exploitation of a natural resource: a satisfying use of Chichilnisky's criterion," Working Papers 06-03, LAMETA, Universtiy of Montpellier, revised Sep 2006. [Downloadable!]
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  10. Dixit, Avinash & Hammond, Peter & Hoel, Michael, 1980. "On Hartwick's Rule for Regular Maximin Paths of Capital Accumulation and Resource Depletion," Review of Economic Studies, Blackwell Publishing, vol. 47(3), pages 551-56, April. [Downloadable!] (restricted)
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  15. Asheim, Geir B, 1988. "Rawlsian Intergenerational Justice as a Markov-Perfect Equilibrium in a Resource Technology," Review of Economic Studies, Blackwell Publishing, vol. 55(3), pages 469-83, July. [Downloadable!] (restricted)
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Cited by:
(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. Bazhanov, Andrei, 2006. "Decreasing of Oil Extraction: Consumption behavior along transition paths," MPRA Paper 469, University Library of Munich, Germany. [Downloadable!]
  2. Vincent Martinet, 2007. "Maximizing minimal rights for sustainability: a viability approach," EconomiX Working Papers 2007-20, University of Paris West - Nanterre la Défense, EconomiX. [Downloadable!]
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