The strategic dimension of financing global public goods
dc.bibliographicCitation.firstPage | 103423 | |
dc.bibliographicCitation.journalTitle | European Economic Review | eng |
dc.bibliographicCitation.volume | 127 | |
dc.contributor.author | Kornek, Ulrike | |
dc.contributor.author | Edenhofer, Ottmar | |
dc.date.accessioned | 2022-12-08T07:12:01Z | |
dc.date.available | 2022-12-08T07:12:01Z | |
dc.date.issued | 2020 | |
dc.description.abstract | One challenge in addressing transboundary problems such as climate change is the incentive to free-ride. Transfers from multilateral compensation funds are often used to counteract such incentives, albeit with varying success. We examine how such funds can change the incentive to free-ride in a global public-goods game. In our game, self-interested countries choose their own preferred course, deciding their voluntary public good provision, whether to join a fund that offers compensation for providing the public good and the volume of compensatory payments. We show that (i) total public-good provision is higher when those contributing are given more compensation; and (ii) non-participation in the fund can be punished if the remaining members decrease their public-good provision sufficiently. We then examine three specific fund designs. In the first, the compensation paid to each country is equal to the percentage of above-average total costs for public-goods provision. This design is best able to deter free-riding and can establish the social optimum as the equilibrium. In the second, the compensation paid to each country is a function of the marginal cost of their public-good provision. Here there are significant incentives to free-ride. In the third case, the monetary resources provided by the fund are fixed, a design frequently encountered in international funds. This design is the one least able to deter free-riding. © 2020 The Author(s) | eng |
dc.description.version | publishedVersion | |
dc.identifier.uri | https://oa.tib.eu/renate/handle/123456789/10542 | |
dc.identifier.uri | http://dx.doi.org/10.34657/9578 | |
dc.language.iso | eng | |
dc.publisher | Amsterdam : Elsevier | |
dc.relation.doi | https://doi.org/10.1016/j.euroecorev.2020.103423 | |
dc.relation.essn | 1873-572X | |
dc.rights.license | CC BY 4.0 Unported | |
dc.rights.uri | https://creativecommons.org/licenses/by/4.0/ | |
dc.subject.ddc | 300 | |
dc.subject.ddc | 330 | |
dc.subject.other | Climate change | eng |
dc.subject.other | Global public goods | eng |
dc.subject.other | International environmental agreements | eng |
dc.subject.other | Transfers | eng |
dc.title | The strategic dimension of financing global public goods | eng |
dc.type | Article | eng |
dc.type | Text | eng |
tib.accessRights | openAccess | |
wgl.contributor | PIK | |
wgl.subject | Umweltwissenschaften | ger |
wgl.type | Zeitschriftenartikel | ger |
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