A note on redistributive fairness and economic reform
To understand reasons for possible failures of 'good' economic reforms, we consider an institution which is always successful in making the best public decision from the utilitarian perspective. We show it is bound to introduce inequality if costs of a reform are privately known: the losers can not be always compensated. Thus, if equity is a primary concern, then some reforms with positive aggregate net gain might not be undertaken. If the utilitarian welfare is the only guide for making public decisions, implementing a reform might require the ability to ignore the associated social costs of inequality.
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.:
- Dani Rodrik, 1996. "Understanding Economic Policy Reform," Journal of Economic Literature, American Economic Association, vol. 34(1), pages 9-41, March.
- Rob, R., 1988.
"Pollution Claim Settlements Under Private Information,"
19-88, Tel Aviv.
- Rob, Rafael, 1989. "Pollution claim settlements under private information," Journal of Economic Theory, Elsevier, vol. 47(2), pages 307-333, April.
- Ehud Lehrer & Zvika Neeman, 2000. "The Scope of Anonymous Voluntary Bargaining Under Asymmetric Information," Review of Economic Studies, Oxford University Press, vol. 67(2), pages 309-326.
- Roger B. Myerson & Mark A. Satterthwaite, 1981.
"Efficient Mechanisms for Bilateral Trading,"
469S, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- George J. Mailath & Andrew Postlewaite, 1990. "Asymmetric Information Bargaining Problems with Many Agents," Review of Economic Studies, Oxford University Press, vol. 57(3), pages 351-367.
- Tommasi, Mariano & Velasco, Andres, 1995.
"Where are we in the Political Economy of Reform?,"
95-20, C.V. Starr Center for Applied Economics, New York University.
- Mariano Tommasi, 1995. "Where are we in the Political Economy of Reform?," UCLA Economics Working Papers 733, UCLA Department of Economics.
- Mariano Tommasi & Andres Velasco, 1995. "Where Are We in the Political Economy of Reform?," Working Papers 11, Universidad de San Andres, Departamento de Economia, revised Apr 1996.
- Harberger, Arnold C, 1993. "Secrets of Success: A Handful of Heroes," American Economic Review, American Economic Association, vol. 83(2), pages 343-50, May.
- Petia Topalova, 2007.
"Trade Liberalization, Poverty and Inequality: Evidence from Indian Districts,"
in: Globalization and Poverty, pages 291-336
National Bureau of Economic Research, Inc.
- Petia Topalova, 2005. "Trade Liberalization, Poverty And Inequality: Evidence From Indian Districts," Working Papers id:222, eSocialSciences.
- Petia Topalova, 2005. "Trade Liberalization, Poverty, and Inequality: Evidence from Indian Districts," NBER Working Papers 11614, National Bureau of Economic Research, Inc.
- Sanjay Jain & Sharun W. Mukand, 2003. "Redistributive Promises and the Adoption of Economic Reform," American Economic Review, American Economic Association, vol. 93(1), pages 256-264, March.
- McAfee, R Preston & Reny, Philip J, 1992. "Correlated Information and Mechanism Design," Econometrica, Econometric Society, vol. 60(2), pages 395-421, March.
- d'ASPREMONT, Claude & GERARD-VARET, Louis-André, .
"Incentives and incomplete information,"
CORE Discussion Papers RP
354, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Fernandez, Raquel & Rodrik, Dani, 1991. "Resistance to Reform: Status Quo Bias in the Presence of Individual-Specific Uncertainty," American Economic Review, American Economic Association, vol. 81(5), pages 1146-55, December.
When requesting a correction, please mention this item's handle: RePEc:eee:deveco:v:86:y:2008:i:2:p:447-452. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If references are entirely missing, you can add them using this form.