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Inequality, Market Imperfections, and Collective Action Problems

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  • Pranab Bardhan

    (University of California, Berkeley)

  • Maitreesh Ghatak

    (University of Chicago)

Abstract

In this paper we analyze the effects of wealth inequality on the provision of public goods and management of common-property resources (CPR) when there are market imperfections in inputs that are complementary in production to the collective good. We show that for public goods inequality impedes efficiency, while for use of CPRs there is an inverse U-shaped relationship between inequality and efficiency. We discuss the implications of these theoretical results for redistributive policies such as land reform.

Suggested Citation

  • Pranab Bardhan & Maitreesh Ghatak, 2000. "Inequality, Market Imperfections, and Collective Action Problems," Public Economics 0004001, EconWPA.
  • Handle: RePEc:wpa:wuwppe:0004001 Note: 25 pages Adobe.pdf
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    References listed on IDEAS

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    Cited by:

    1. La Ferrara, Eliana, 2002. "Inequality and group participation: theory and evidence from rural Tanzania," Journal of Public Economics, Elsevier, pages 235-273.
    2. Jeff Dayton-Johnson & Pranab Bardhan, 2002. "Inequality And Conservation On The Local Commons: A Theoretical Exercise," Economic Journal, Royal Economic Society, vol. 112(481), pages 577-602, July.
    3. Deininger, Klaus & May, Julian, 2000. "Can there be growth with equity : an initial assessment of land reform in South Africa," Policy Research Working Paper Series 2451, The World Bank.
    4. Deininger, Klaus & Yadav, Vandana, 2011. "Long-term Effects of Land Reform on Human Capital Accumulation: Evidence from West Bengal," WIDER Working Paper Series 082, World Institute for Development Economic Research (UNU-WIDER).
    5. Baland, Jean-Marie & Platteau, Jean-Philippe, 2003. "Economics of common property management regimes," Handbook of Environmental Economics,in: K. G. Mäler & J. R. Vincent (ed.), Handbook of Environmental Economics, edition 1, volume 1, chapter 4, pages 127-190 Elsevier.
    6. Deininger, Klaus W. & Jin, Songqing & Yadav, Vandana, 2008. "Impact of Land Reform on Productivity, Land Value and Human Capital Investment: Household Level Evidence from West Bengal," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6277, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

    More about this item

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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