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Infrastructures publiques et politiques de développement décentralisées

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  • Figuières, Charles

    (Department of Economics)

  • Gardères, Philippe

    (Greqam)

  • Rychen, Frédéric

    (Greqam)

Abstract

This article provides a theoretical contribution on the issue of under-investment of public capitals. In a differential game of accumulation of capital between two jurisdictions, the open loop Nash equilibrium and the centralized solution converge towards their respective steady states. In the long run we characterize the inefficiency of the Nash equilibrium using as a benchmark case the utilitarian centralized outcome. When the stocks of infrastructures are strategic complements, the jurisdictions under-invest (over-invest) in situations with negative (positive) externalities. When the stocks are strategic substitutes the same results hold for similar jurisdictions. On the contrary when the cost structures of the jurisdictions are different enough, it is shown within an example that the low-cost jurisdiction under-invests whereas the high-cost jurisdiction over-invests. We then broach briefly the economic policy implications of these results. Cet article apporte une contribution théorique au débat sur le sous-investissement en capitaux publics. Il utilise pour cela un jeu différentiel d’accumulation de capitaux entre deux collectivités. Dans ce jeu l’équilibre de Nash en boucle ouverte et la solution centralisée du jeu convergent à long terme vers un régime stationnaire. Dans le long terme nous étudions la nature de l’inefficacité de l’équilibre de Nash en prenant comme référence la solution centralisée utilitariste. Lorsque les stocks d’infrastructures sont des compléments stratégiques, les collectivités surinvestissent (sous-investissent) en présence d’externalités négatives (positives). Lorsque les stocks d’infrastructures sont des substituts stratégiques, les mêmes résultats restent vrais si les collectivités sont similaires. En revanche, nous montrons dans un exemple que lorsque les collectivités ont des structures de coûts assez différentes, la collectivité qui a le coût le plus faible sous-investit tandis que la collectivité qui a le coût le plus fort surinvestit. Nous discutons ensuite brièvement les implications de ces résultats en termes de politiques économiques.

Suggested Citation

  • Figuières, Charles & Gardères, Philippe & Rychen, Frédéric, 2002. "Infrastructures publiques et politiques de développement décentralisées," L'Actualité Economique, Société Canadienne de Science Economique, vol. 78(4), pages 539-570, Décembre.
  • Handle: RePEc:ris:actuec:v:78:y:2002:i:4:p:539-570
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    Cited by:

    1. Denis Claude & Charles Figuières & Mabel Tidball, 2012. "Regulation of Investments in Infrastructure: The Interplay between Strategic Behaviors and Initial Endowments," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 14(1), pages 35-66, February.
    2. C. Dembour, 2008. "Competition for Business Location: A Survey," Journal of Industry, Competition and Trade, Springer, vol. 8(2), pages 89-111, June.
    3. Charles Figuières, 2009. "Markov interactions in a class of dynamic games," Theory and Decision, Springer, vol. 66(1), pages 39-68, January.

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    More about this item

    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects

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