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Equal Sacrifice and Fair Burden Sharing in a Public Goods Economy


  • Wolfgang Buchholz
  • Wolfgang Peters


Applying a willingness to pay approach known from contingent valuation in environmental economics, we develop an ordinally based measure for the size of individual sacrifice that is connected with an agent's contribution to a public good. We construct a selection mechanism that picks the unique efficient solution among all allocations that have an equal sacrifice as defined in this way. We show that the solution thus obtained correspond to Moulin’s egalitarian equivalent allocation, conforms to both the ability to pay and the benefit principles, and has much in common with the Lindahl equilibrium.

Suggested Citation

  • Wolfgang Buchholz & Wolfgang Peters, 2007. "Equal Sacrifice and Fair Burden Sharing in a Public Goods Economy," CESifo Working Paper Series 1997, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_1997

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    References listed on IDEAS

    1. Kaul, Inge & Conceicao, Pedro & Le Goulven, Katell & Mendoza, Ronald U. (ed.), 2003. "Providing Global Public Goods: Managing Globalization," OUP Catalogue, Oxford University Press, number 9780195157413.
    2. Wolfgang Buchholz & Wolfgang Peters, 2007. "Justifying the Lindahl solution as an outcome of fair cooperation," Public Choice, Springer, vol. 133(1), pages 157-169, October.
    3. Lasse Ringius & Asbjørn Torvanger & Arild Underdal, 2002. "Burden Sharing and Fairness Principles in International Climate Policy," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 2(1), pages 1-22, March.
    4. Mitra, Tapan & Ok, Efe A, 1996. "Personal Income Taxation and the Principle of Equal Sacrifice Revisited," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 37(4), pages 925-948, November.
    5. Lange, Andreas & Vogt, Carsten & Ziegler, Andreas, 2007. "On the importance of equity in international climate policy: An empirical analysis," Energy Economics, Elsevier, vol. 29(3), pages 545-562, May.
    6. Udo Ebert, 2003. "Environmental Goods and the Distribution of Income," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 25(4), pages 435-459, August.
    7. Hines Jr., James R., 2000. "What is benefit taxation?," Journal of Public Economics, Elsevier, vol. 75(3), pages 483-492, March.
    8. Moulin, Herve, 1987. "Egalitarian-Equivalent Cost Sharing of a Public Good," Econometrica, Econometric Society, vol. 55(4), pages 963-976, July.
    9. Bergstrom, Theodore & Blume, Lawrence & Varian, Hal, 1986. "On the private provision of public goods," Journal of Public Economics, Elsevier, vol. 29(1), pages 25-49, February.
    10. François Maniquet & Yves Sprumont, 2004. "Fair Production and Allocation of an Excludable Nonrival Good," Econometrica, Econometric Society, vol. 72(2), pages 627-640, March.
    11. Theodore C. Bergstrom, 2006. "Benefit-Cost in a Benevolent Society," American Economic Review, American Economic Association, vol. 96(1), pages 339-351, March.
    12. Moyes, Patrick, 2003. "Redistributive effects of minimal equal sacrifice taxation," Journal of Economic Theory, Elsevier, vol. 108(1), pages 111-140, January.
    13. Wolfgang Buchholz & Richard Cornes & Wolfgang Peters, 2006. "Lindahl Equilibrium Versus Voluntary Contribution to a Public Good: The Role of the Income Distribution," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 62(1), pages 28-49, March.
    14. Sandler,Todd, 2004. "Global Collective Action," Cambridge Books, Cambridge University Press, number 9780521542548, May.
    15. Jon R. Neill, 2000. "The benefit and sacrifice principles of taxation: A synthesis," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 17(1), pages 117-124.
    16. Udo Ebert & Georg Tillmann, 2007. "Distribution-neutral provision of public goods," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 29(1), pages 107-124, July.
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    Cited by:

    1. L.F.M. Groot & J. Swart, 2015. "From Nash to Lindahl in Climate Change Policy," Working Papers 15-01, Utrecht School of Economics.
    2. Bruno Martorano, 2014. "The Impact of Uruguay's 2007 Tax Reform on Equity and Efficiency," Development Policy Review, Overseas Development Institute, vol. 32(6), pages 701-714, November.
    3. Wolfgang Buchholz & Alexander Haupt & Wolfgang Peters, 2016. "Equity as a Prerequisite for Stability of Cooperation on Global Public Good Provision," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 65(1), pages 61-78, September.

    More about this item


    public goods; cooperative solutions; fairness; egalitarian equivalent solutions;

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods


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