Non-cooperative and cooperative policy reforms under uncertainty and spillovers

Arbeitspapier

When countries need to implement costly economic policy reforms, these often imply uncertainties about their effectiveness for the home country and their spillovers to other countries. We develop a model to show that under these circumstances countries implement too few or too many policy reforms. From a social perspective, too many reforms follow if the spillover effects of reforms become sufficiently uncertain. Since centralization of policies to correct inefficient policies is often not possible, we look for alternative instruments that can restore the efficient level of reforms. We compare subsidizing reform e orts with insuring against bad outcomes, and argue that subsidies are advantageous in terms of requiring less information for implementation.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: MAGKS Joint Discussion Paper Series in Economics ; No. 07-2017

Classification and Topics

• Classification: Wirtschaft ; International Institutional Arrangements ; State and Local Government; Intergovernmental Relations: General ; Innovation; Research and Development; Technological Change; Intellectual Property Rights: General
• Subject: policy reforms ; spillovers ; policy uncertainty ; free-riding ; subsidy ; insurance

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Hefeker, Carsten ; Neugart, Michael
• Event: Veröffentlichung
• (who): Philipps-University Marburg, School of Business and Economics
• (where): Marburg
• (when): 2017

Further information

• Handle: http://hdl.handle.net/10419/162653
• Last update: 10.03.2025, 11:42 AM CET