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  • strategic-decentralization-rf-cw-2017

    Rights statement: This is the author’s version of a work that was accepted for publication in Journal of Environmental Economics and Management. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Journal of Environmental Economics and Management, 92, 2018 DOI: 10.1016/j.jeem.2017.08.006

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Strategic decentralization and the provision of global public goods

Research output: Contribution to journalJournal article

Published
<mark>Journal publication date</mark>1/11/2018
<mark>Journal</mark>Journal of Environmental Economics and Management
Volume92
Number of pages22
Pages (from-to)537-558
Publication statusPublished
Original languageEnglish

Abstract

We study strategic decentralization in the provision of a global public good. A federation, with the aim of maximizing the aggregate utility of its members, may find it advantageous to decentralize the decision-making, so that its members act autonomously to maximize their own utility. If utility is fully transferable within a federation, the larger a federation is or the more sensitive it is to the public good, the more it has incentives to remain centralized. If an overall increase in the sensitivity to the public good induces some federation(s) to decentralize, it may lead to a decrease in the aggregate provision. With non-transferable utility within a federation, those members that are smaller or less sensitive to the public good are more likely to prefer decentralization. Some members within a federation becoming more sensitive to the public good may thus lead to a lower aggregate provision, because the increased heterogeneity of the federation makes it more inclined to decentralize. © 2017 Elsevier Inc.

Bibliographic note

This is the author’s version of a work that was accepted for publication in Journal of Environmental Economics and Management. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Journal of Environmental Economics and Management, 92, 2018 DOI: 10.1016/j.jeem.2017.08.006