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Potentially Harmful International Cooperation on Global Public Good Provision

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  • Wolfgang Buchholz
  • Richard Cornes
  • Dirk Rübbelke

Abstract

Recent international climate negotiations suggest that complete agreements are unlikely to materialize. Instead, partial cooperation between like-minded countries appears a more likely outcome. In this paper we analyze the effects of such partial cooperation between like-minded countries. In doing so, we link the literature on partial cooperation with so-called matching approaches. Matching schemes are regarded as providing a promising approach to overcome undersupply of public goods like climate protection. The functioning of matching mechanisms in a setting with an incomplete agreement, i.e. a contract where only a subset of the players participates, has however not been investigated yet. This paper fills this research gap by analyzing incomplete matching agreements in the context of international climate protection. We analyse their effect on both welfare and the global climate protection level. We show that matching coalitions may bring about a decline in global public good provision and a reduction in the welfare of outsiders.

Suggested Citation

  • Wolfgang Buchholz & Richard Cornes & Dirk Rübbelke, 2012. "Potentially Harmful International Cooperation on Global Public Good Provision," CESifo Working Paper Series 3891, CESifo.
  • Handle: RePEc:ces:ceswps:_3891
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    Cited by:

    1. Buchholz, Wolfgang & Hattori, Keisuke, 2024. "A paradox of coalition building in public good provision," Economic Modelling, Elsevier, vol. 135(C).
    2. Foucart, Renaud & Wan, Cheng, 2018. "Strategic decentralization and the provision of global public goods," Journal of Environmental Economics and Management, Elsevier, vol. 92(C), pages 537-558.
    3. Andreas Löschel & Dirk Rübbelke, 2014. "On the Voluntary Provision of International Public Goods," Economica, London School of Economics and Political Science, vol. 81(322), pages 195-204, April.
    4. Ngo Van Long, 2014. "The Green Paradox in Open Economies," CESifo Working Paper Series 4639, CESifo.
    5. Molina, Chai & Akcay, Erol & Dieckmann, Ulf & Levin, Simon & Rovenskaya, Elena A., 2018. "Combating climate change with matching-commitment agreements," SocArXiv 7yc3g, Center for Open Science.
    6. Boadway, Robin & Song, Zhen & Tremblay, Jean-François, 2013. "Non-cooperative pollution control in an inter-jurisdictional setting," Regional Science and Urban Economics, Elsevier, vol. 43(5), pages 783-796.
    7. Robert Hahn & Robert Ritz, 2014. "Optimal Altruism in Public Good Provision," Cambridge Working Papers in Economics 1403, Faculty of Economics, University of Cambridge.
    8. Chen, Cuicui & Zeckhauser, Richard, 2018. "Collective action in an asymmetric world," Journal of Public Economics, Elsevier, vol. 158(C), pages 103-112.
    9. Chowdhury Mohammad Sakib Anwar & Jorge Bruno & Renaud Foucart & Sonali SenGupta, 2023. "Efficient Public Good Provision in a Multipolar World," Papers 2303.10514, arXiv.org, revised Jul 2023.
    10. Colombo, Luca & Labrecciosa, Paola & Van Long, Ngo, 2022. "A dynamic analysis of international environmental agreements under partial cooperation," European Economic Review, Elsevier, vol. 143(C).
    11. Sferra, Fabio & Tavoni, Massimo, 2013. "Endogenous Participation in a Partial Climate Agreement with Open Entry: A Numerical Assessment," Climate Change and Sustainable Development 156486, Fondazione Eni Enrico Mattei (FEEM).
    12. Wolfgang Buchholz & Todd Sandler, 2016. "Olson’s exploitation hypothesis in a public good economy: a reconsideration," Public Choice, Springer, vol. 168(1), pages 103-114, July.
    13. Kristina Govorukha & Philip Mayer & Dirk Rübbelke, 2021. "Fragmented Landscape of European Policies in the Energy Sector: First-Mover Advantages," CESifo Working Paper Series 9093, CESifo.
    14. Dijkstra, Bouwe R. & Nentjes, Andries, 2020. "Pareto-Efficient Solutions for Shared Public Good Provision: Nash Bargaining versus Exchange-Matching-Lindahl," Resource and Energy Economics, Elsevier, vol. 61(C).
    15. Richard Cornes, 2016. "Aggregative Environmental Games," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 63(2), pages 339-365, February.

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    More about this item

    Keywords

    coalition formation; public goods; matching; Pareto optimality; partial cooperation;
    All these keywords.

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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