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Asymmetric impacts and over-provision of public goods

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  • Louis-Gaëtan Giraudet

    () (CIRED - Centre international de recherche sur l'environnement et le développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - AgroParisTech - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique)

  • Céline Guivarch

    () (CIRED - Centre international de recherche sur l'environnement et le développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - AgroParisTech - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique)

Abstract

We elicit simple conditions for an old puzzle -- over-provision of a public good. An asymmetric public good that benefits some contributors while harming others is subject to both free riding and free driving. Even though aggregate impacts are net positive, it can be over-provided if free drivers face provision costs that are sufficiently lower than free riders'. Asymmetric impacts further impose restrictions on Hicks-Kaldor improvements. We establish these results in a parsimonious model that can easily be applied to a variety of so-called NIMBY problems, for instance new public infrastructures and global warming mitigation.

Suggested Citation

  • Louis-Gaëtan Giraudet & Céline Guivarch, 2018. "Asymmetric impacts and over-provision of public goods," CIRED Working Papers hal-01960318, HAL.
  • Handle: RePEc:hal:ciredw:hal-01960318
    Note: View the original document on HAL open archive server: https://hal-enpc.archives-ouvertes.fr/hal-01960318
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    References listed on IDEAS

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    1. Vassiliki Manoussi & Anastasios Xepapadeas, 2014. "Cooperation and Competition in Climate Change Policies: Mitigation and Climate Engineering when Countries are Asymmetric," DEOS Working Papers 1408, Athens University of Economics and Business.
    2. Matthew J. Kotchen, 2006. "Green Markets and Private Provision of Public Goods," Journal of Political Economy, University of Chicago Press, vol. 114(4), pages 816-845, August.
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    7. Wolfgang Buchholz & Wolfgang Peters, 2001. "The overprovision anomaly of private public good supply," Journal of Economics, Springer, vol. 74(1), pages 63-78, February.
    8. Louis-Gaëtan Giraudet & Céline Guivarch, 2016. "Global warming as an asymmetric public bad," Working Papers 2016.26, FAERE - French Association of Environmental and Resource Economists.
    9. Stephane Hallegatte & Mook Bangalore & Laura Bonzanigo & Marianne Fay & Tamaro Kane & Ulf Narloch & Julie Rozenberg & David Treguer & Adrien Vogt-Schilb, 2016. "Shock Waves," World Bank Publications, The World Bank, number 22787, June.
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    Keywords

    NIMBY; free driving; public good; externalities; free riding; global warming;

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