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Kantian Equilibrium, Income Inequality, and Global Public Goods

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  • Yukihiro Nishimura

    (Osaka University and CESifo)

Abstract

This paper develops a Kantian equilibrium framework, subsuming the global pollution model with private ownership, wherein agents condition their contributions on a universalizable moral imperative reflecting income and preference heterogeneity. After showing a specific proportionality assumption linking Kantian reasoning to other agents’ behavior that must make the Kantian equilibrium coincide with the Lindahl equilibrium, we show that the level of the public good may or may not increase with income inequality. Inequality invariance is observed in some solution. Applying this model to a global pollution context, we demonstrate that the Lindahl allocation may fail to Pareto dominate the voluntary contribution (disagreement) equilibrium. We compare the Lindahl outcome with other proposed solutions to global public good provision, focusing in particular on the role of international income transfers and their ability to achieve Pareto improvements over the voluntary contribution (disagreement) equilibrium. Our analysis contributes to a reinterpretation of morally grounded mechanisms for global public good provision, bridging normative ethics with economic design.

Suggested Citation

  • Yukihiro Nishimura, 2025. "Kantian Equilibrium, Income Inequality, and Global Public Goods," Discussion Papers in Economics and Business 25-04-Rev., Osaka University, Graduate School of Economics, revised Jul 2025.
    • Handle: RePEc:osk:wpaper:2504r
    as

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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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