Kantian Equilibrium, Income Inequality, and Global Public Goods

This paper develops a Kantian equilibrium framework that extends the global pollution model with private ownership, where agents condition their contributions on a universalizable moral imperative reflecting both income and preference heterogeneity. For both the Lindahl outcome and other proposed mechanisms, we identify specific proportionality conditions under which Kantian reasoning replicates these solutions as equilibrium behavior. We further show that the provision of public good does not necessarily increase with income inequality, and that some solutions exhibit invariance to inequality. Finally, we demonstrate that tradable permits may fail to achieve sufficient international redistribution to Southern countries to generate Pareto improvements over the voluntary contribution (disagreement) equilibrium. Grandfathering involves a form of proportionality between income and permit endowments, we show that this structure is better motivated by altruism. Our analysis contributes to a reinterpretation of morally grounded mechanisms for global public good provision, bridging normative ethics with economic design.