A Planner of Global Income Transfers: International Public Goods and Productivity Differentials

The purpose of this paper is to produce an explicit rule of planner for country h on global income redistribution and to investigate the global effects of income transfer among N countries on national welfare of country h. The finding is, (i) when the cross product of costs of producing public good except for cost of country i is larger than the average cross product of costs except for one country (this positive difference is called as productive advantage for country i), the country i is an income receiver; when there are more than two receivers, the ratio of received income for country i among the receivers is the ratio of productive advantage. (ii) Specifying the particular level of the adjustment expense for global income transfer, the planner can decide the values of income transfer for all country. (iii) Even though any country becomes a planner of income transfer, these conclusions hold and moreover, each country gets the same maximum utility level. (iv) All conclusions are derived based on the well-known information on cost of producing public goods and income for all countries, and the adjustment expense for income transfer.