Policies to internalize reciprocal international spillovers

Arbeitspapier

An effective policy scheme to overcome the suboptimal low provision levels of global public goods is developed in this paper. By suggesting a decentralized approach to raise environmental public good provision levels we take account of the lack of a coercive global authority that is able to enforce efficient international environmental regulations. In our model individual regions voluntarily commence international negotiations on public good provision, which are accompanied by side-payments. These side-payments are financed by means of regional externality-correcting taxes. Side-payments and national tax rates are designed in a mutually dependent way. The decentralized scheme we recommend for approaching Pareto efficient Nash equilibria is based on the ideas of Coasean negotiations and Pigouvian taxes. As it is implementable for a wide class of Nash solutions, it is applicable to various international externality problems.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 2058

Classification and Topics

• Classification: Wirtschaft ; Foreign Aid ; Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies
• Subject: Öffentliches Gut ; International ; Umweltschutz ; Internationale Umweltpolitik ; Verhandlungen ; Coase-Theorem ; Internalisierung externer Effekte ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Altemeyer-Bartscher, Martin ; Rübbelke, Dirk T. G. ; Sheshinski, Eytan
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2007

Further information

• Handle: http://hdl.handle.net/10419/26103
• Last update: 10.03.2025, 11:44 AM CET