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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Final published version
Research output: Contribution to Journal/Magazine › Journal article › peer-review
Research output: Contribution to Journal/Magazine › Journal article › peer-review
}
TY - JOUR
T1 - Strategic decentralization and the provision of global public goods
AU - Foucart, R.
AU - Wan, C.
N1 - 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
PY - 2018/11/1
Y1 - 2018/11/1
N2 - 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.
AB - 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.
KW - Decentralization
KW - Delegation
KW - Global public goods
KW - Decision making
KW - Non-transferable utilities
KW - Public goods
KW - Aggregates
KW - decentralization
KW - decision making
KW - federal system
KW - heterogeneity
KW - public goods
KW - service provision
KW - strategic approach
U2 - 10.1016/j.jeem.2017.08.006
DO - 10.1016/j.jeem.2017.08.006
M3 - Journal article
VL - 92
SP - 537
EP - 558
JO - Journal of Environmental Economics and Management
JF - Journal of Environmental Economics and Management
SN - 0095-0696
ER -