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

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  • Francisco Alvarez-Cuadrado

    ()

  • Ngo Van Long

    ()

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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Bibliographic Info

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
Date of revision:
Handle: RePEc:mcl:mclwop:2007-03

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  1. > Environmental and Natural Resource Economics > Climate economics > Discounting, equity, uncertainty
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Cited by:
  1. 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.
  2. Ngo Long, 2011. "Dynamic Games in the Economics of Natural Resources: A Survey," Dynamic Games and Applications, Springer, vol. 1(1), pages 115-148, March.
  3. Charles Figuières & Hervé Guyomard & Gilles Rotillon, 2010. "Sustainable Development: Between Moral Injunctions and Natural Constraints," Sustainability, MDPI, Open Access Journal, vol. 2(11), pages 3608-3622, November.
  4. Charles Figuières & Mabel Tidball, 2012. "Sustainable exploitation of a natural resource: a satisfying use of Chichilnisky’s criterion," Economic Theory, Springer, vol. 49(2), pages 243-265, February.
  5. Alain Ayong Le Kama & Thai Ha-Huy & Cuong Le Van & Katheline Schubert, 2014. "A never-decisive and anonymous criterion for optimal growth models," Economic Theory, Springer, vol. 55(2), pages 281-306, February.
  6. Richard S.J. Tol, 2012. "Climate Policy with Bentham-Rawls Preferences," Working Paper Series 3812, Department of Economics, University of Sussex.
  7. repec:ipg:wpaper:2 is not listed on IDEAS
  8. Richard S.J. Tol, 2012. "Targets for Global Climate Policy: An Overview," Working Paper Series 3712, Department of Economics, University of Sussex.
  9. Michielsen, T.O., 2013. "Environmental Catastrophes Under Time-inconsistent Preferences," Discussion Paper 2013-013, Tilburg University, Center for Economic Research.
  10. Bazhanov, Andrei, 2006. "Decreasing of Oil Extraction: Consumption behavior along transition paths," MPRA Paper 469, University Library of Munich, Germany.
  11. Luc Lauwers, 2012. "Intergenerational equity, efficiency, and constructibility," Economic Theory, Springer, vol. 49(2), pages 227-242, February.
  12. Thomas Michielsen, 2013. "Environmental Catastrophes under Time-Inconsistent Preferences," Working Papers 2013.55, Fondazione Eni Enrico Mattei.
  13. Charles Figuières & Ngo Van Long & Mabel Tidball, 2013. "The MBR Intertemporal Choice Criterion and Rawls' Just Savings Principle," Working Papers 13-02, LAMETA, Universtiy of Montpellier, revised Feb 2013.
  14. Martinet, Vincent, 2011. "A characterization of sustainability with indicators," Journal of Environmental Economics and Management, Elsevier, vol. 61(2), pages 183-197, March.
  15. Bazhanov, Andrei V., 2013. "Constant-utility paths in a resource-based economy," Resource and Energy Economics, Elsevier, vol. 35(3), pages 342-355.
  16. Robert D. Cairns, 2011. "Accounting for Sustainability: A Dissenting Opinion," Sustainability, MDPI, Open Access Journal, vol. 3(9), pages 1341-1356, August.

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