IDEAS home Printed from https://ideas.repec.org/a/bla/econom/v81y2014i322p205-223.html
   My bibliography  Save this article

Potentially Harmful International Cooperation on Global Public Good Provision

Author

Listed:
  • Wolfgang Buchholz
  • Richard Cornes
  • Dirk Rübbelke

Abstract

type="main" xml:id="ecca12074-abs-0001"> Experience from climate policy suggests that full cooperation among all countries is not a likely outcome. In this paper we therefore consider the case where only members of a subgroup of countries cooperate by reciprocally matching their public good contributions. In a two-stage game, matching rates are set at stage 1 then national contributions are chosen at stage 2. In the case of small coalitions, negative matching may result in the subgame-perfect equilibrium that decreases global public good provision and outsiders' welfare. Moreover, a growing number of countries may paradoxically entail a reduction of equilibrium public good supply.

Suggested Citation

  • Wolfgang Buchholz & Richard Cornes & Dirk Rübbelke, 2014. "Potentially Harmful International Cooperation on Global Public Good Provision," Economica, London School of Economics and Political Science, vol. 81(322), pages 205-223, April.
    • Handle: RePEc:bla:econom:v:81:y:2014:i:322:p:205-223
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1111/ecca.2014.81.issue-322
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Boadway, Robin & Song, Zhen & Tremblay, Jean-Francois, 2007. "Commitment and matching contributions to public goods," Journal of Public Economics, Elsevier, vol. 91(9), pages 1664-1683, September.
    2. Dirk T. G. Rübbelke, 2006. "Analysis of an international environmental matching agreement," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 8(1), pages 1-31, December.
    3. Kirchsteiger, Georg & Puppe, Clemens, 1997. "On the possibility of efficient private provision of public goods through government subsidies," Journal of Public Economics, Elsevier, vol. 66(3), pages 489-504, December.
    4. Andreoni, James & Bergstrom, Ted, 1996. "Do Government Subsidies Increase the Private Supply of Public Goods?," Public Choice, Springer, vol. 88(3-4), pages 295-308, September.
    5. Guttman, Joel M, 1978. "Understanding Collective Action: Matching Behavior," American Economic Review, American Economic Association, vol. 68(2), pages 251-255, May.
    6. Michael Finus & Juan-Carlos Altamirano-Cabrera & Ekko Ierland, 2005. "The effect of membership rules and voting schemes on the success of international climate agreements," Public Choice, Springer, vol. 125(1), pages 95-127, July.
    7. Buchholz, Wolfgang & Cornes, Richard & Rübbelke, Dirk, 2011. "Interior matching equilibria in a public good economy: An aggregative game approach," Journal of Public Economics, Elsevier, vol. 95(7-8), pages 639-645, August.
    8. Danziger, Leif & Schnytzer, Adi, 1991. "Implementing the Lindahl voluntary-exchange mechanism," European Journal of Political Economy, Elsevier, vol. 7(1), pages 55-64, April.
    9. Boadway, Robin & Song, Zhen & Tremblay, Jean-François, 2011. "The efficiency of voluntary pollution abatement when countries can commit," European Journal of Political Economy, Elsevier, vol. 27(2), pages 352-368, June.
    10. Michael Hoel, 1992. "International environment conventions: The case of uniform reductions of emissions," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 2(2), pages 141-159, March.
    11. Hoel, Michael, 1991. "Global environmental problems: The effects of unilateral actions taken by one country," Journal of Environmental Economics and Management, Elsevier, vol. 20(1), pages 55-70, January.
    12. Carraro, Carlo & Siniscalco, Domenico, 1993. "Strategies for the international protection of the environment," Journal of Public Economics, Elsevier, vol. 52(3), pages 309-328, October.
    13. Barrett, Scott, 1994. "Self-Enforcing International Environmental Agreements," Oxford Economic Papers, Oxford University Press, vol. 46(0), pages 878-894, Supplemen.
    14. Josef Falkinger & Johann K. Brunner, 1999. "Taxation in an economy with private provision of public goods," Review of Economic Design, Springer;Society for Economic Design, vol. 4(4), pages 357-379.
    15. Boadway, Robin & Pestieau, Pierre & Wildasin, David, 1989. "Tax-transfer policies and the voluntary provision of public goods," Journal of Public Economics, Elsevier, vol. 39(2), pages 157-176, July.
    16. Falkinger, Josef, 1996. "Efficient private provision of public goods by rewarding deviations from average," Journal of Public Economics, Elsevier, vol. 62(3), pages 413-422, November.
    17. Michael Hoel & Kerstin Schneider, 1997. "Incentives to participate in an international environmental agreement," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 9(2), pages 153-170, March.
    18. Althammer, Wilhelm & Buchholz, Wolfgang, 1993. "Lindahl-equilibria as the outcome of a non-cooperative game : A reconsideration," European Journal of Political Economy, Elsevier, vol. 9(3), pages 399-405, August.
    19. Richard Cornes & Roger Hartley, 2007. "Aggregative Public Good Games," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 9(2), pages 201-219, April.
    20. Bergstrom, Theodore & Blume, Lawrence & Varian, Hal, 1986. "On the private provision of public goods," Journal of Public Economics, Elsevier, vol. 29(1), pages 25-49, February.
    21. Finus, Michael & Tjotta, Sigve, 2003. "The Oslo Protocol on sulfur reduction: the great leap forward?," Journal of Public Economics, Elsevier, vol. 87(9-10), pages 2031-2048, September.
    22. repec:bla:econom:v:54:y:1987:i:213:p:1-19 is not listed on IDEAS
    23. Varian, Hal R., 1994. "Sequential contributions to public goods," Journal of Public Economics, Elsevier, vol. 53(2), pages 165-186, February.
    24. Buchholz, Wolfgang & Cornes, Richard & Rübbelke, Dirk, 2012. "Matching as a cure for underprovision of voluntary public good supply," Economics Letters, Elsevier, vol. 117(3), pages 727-729.
    25. Cornes, Richard & Hartley, Roger, 2003. "Risk Aversion, Heterogeneity and Contests," Public Choice, Springer, vol. 117(1-2), pages 1-25, October.
    26. Barrett, Scott, 1990. "The Problem of Global Environmental Protection," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 6(1), pages 68-79, Spring.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Chen, Cuicui & Zeckhauser, Richard, 2018. "Collective action in an asymmetric world," Journal of Public Economics, Elsevier, vol. 158(C), pages 103-112.
    2. Buchholz, Wolfgang & Hattori, Keisuke, 2024. "A paradox of coalition building in public good provision," Economic Modelling, Elsevier, vol. 135(C).
    3. Foucart, Renaud & Wan, Cheng, 2018. "Strategic decentralization and the provision of global public goods," Journal of Environmental Economics and Management, Elsevier, vol. 92(C), pages 537-558.
    4. Colombo, Luca & Labrecciosa, Paola & Van Long, Ngo, 2022. "A dynamic analysis of international environmental agreements under partial cooperation," European Economic Review, Elsevier, vol. 143(C).
    5. Chowdhury Mohammad Sakib Anwar & Jorge Bruno & Renaud Foucart & Sonali SenGupta, 2023. "Efficient Public Good Provision in a Multipolar World," Papers 2303.10514, arXiv.org, revised Jul 2023.
    6. Andreas Löschel & Dirk Rübbelke, 2014. "On the Voluntary Provision of International Public Goods," Economica, London School of Economics and Political Science, vol. 81(322), pages 195-204, April.
    7. Ngo Van Long, 2014. "The Green Paradox in Open Economies," CESifo Working Paper Series 4639, CESifo.
    8. Dijkstra, Bouwe R. & Nentjes, Andries, 2020. "Pareto-Efficient Solutions for Shared Public Good Provision: Nash Bargaining versus Exchange-Matching-Lindahl," Resource and Energy Economics, Elsevier, vol. 61(C).
    9. Fabio Sferra & Massimo Tavoni, 2013. "Endogenous Participation in a Partial Climate Agreement with Open Entry: A Numerical Assessment," Working Papers 2013.60, Fondazione Eni Enrico Mattei.
    10. Richard Cornes, 2016. "Aggregative Environmental Games," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 63(2), pages 339-365, February.
    11. Molina, Chai & Akcay, Erol & Dieckmann, Ulf & Levin, Simon & Rovenskaya, Elena A., 2018. "Combating climate change with matching-commitment agreements," SocArXiv 7yc3g, Center for Open Science.
    12. Kristina Govorukha & Philip Mayer & Dirk Rübbelke, 2021. "Fragmented Landscape of European Policies in the Energy Sector: First-Mover Advantages," CESifo Working Paper Series 9093, CESifo.
    13. Boadway, Robin & Song, Zhen & Tremblay, Jean-François, 2013. "Non-cooperative pollution control in an inter-jurisdictional setting," Regional Science and Urban Economics, Elsevier, vol. 43(5), pages 783-796.
    14. Robert Hahn & Robert Ritz, 2014. "Optimal Altruism in Public Good Provision," Cambridge Working Papers in Economics 1403, Faculty of Economics, University of Cambridge.
    15. Wolfgang Buchholz & Todd Sandler, 2016. "Olson’s exploitation hypothesis in a public good economy: a reconsideration," Public Choice, Springer, vol. 168(1), pages 103-114, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Buchholz, Wolfgang & Cornes, Richard & Rübbelke, Dirk, 2011. "Interior matching equilibria in a public good economy: An aggregative game approach," Journal of Public Economics, Elsevier, vol. 95(7), pages 639-645.
    2. Weifeng Liu, 2014. "Participation constraints of matching mechanisms," CAMA Working Papers 2014-63, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    3. Wolfgang Buchholz & Richard Cornes & Dirk Rübbelke, 2011. "Matching as a Cure for Underprovision of Voluntary Public Good Supply: Analysis and an Example," ANU Working Papers in Economics and Econometrics 2011-541, Australian National University, College of Business and Economics, School of Economics.
    4. Wolfgang Buchholz & Richard Cornes & Dirk Rübbelke, 2020. "Matching in the Kolm triangle: interiority and participation constraints of matching equilibria," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 47(5), pages 1039-1050, April.
    5. Buchholz, Wolfgang & Cornes, Richard & Rübbelke, Dirk, 2012. "Matching as a cure for underprovision of voluntary public good supply," Economics Letters, Elsevier, vol. 117(3), pages 727-729.
    6. Andreas Löschel & Dirk Rübbelke, 2014. "On the Voluntary Provision of International Public Goods," Economica, London School of Economics and Political Science, vol. 81(322), pages 195-204, April.
    7. Wolfgang Buchholz & Richard Cornes & Dirk T. G. Rübbelke, 2009. "Existence and Warr Neutrality for Matching Equilibria in a Public Good Economy: An Aggregative Game Approach," CESifo Working Paper Series 2884, CESifo.
    8. Josef Falkinger, 2000. "A Simple Mechanism for the Efficient Provision of Public Goods: Experimental Evidence," American Economic Review, American Economic Association, vol. 90(1), pages 247-264, March.
    9. Boadway, Robin & Song, Zhen & Tremblay, Jean-François, 2013. "Non-cooperative pollution control in an inter-jurisdictional setting," Regional Science and Urban Economics, Elsevier, vol. 43(5), pages 783-796.
    10. Buchholz Wolfgang & Heindl Peter, 2015. "Ökonomische Herausforderungen des Klimawandels," Perspektiven der Wirtschaftspolitik, De Gruyter, vol. 16(4), pages 324-350, December.
    11. Martin Altemeyer-Bartscher & Anil Markandya & Dirk T.G. Rübbelke, 2011. "The Private Provision of International Impure Public Goods: the Case of Climate Policy," Working Papers 2011-09, BC3.
    12. Kirchsteiger, Georg & Puppe, Clemens, 1997. "On the possibility of efficient private provision of public goods through government subsidies," Journal of Public Economics, Elsevier, vol. 66(3), pages 489-504, December.
    13. Karen Pittel & Dirk T.G. Rübbelke, 2006. "Private provision of public goods: incentives for donations," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 33(6), pages 497-519, November.
    14. Bracht, Juergen & Figuieres, Charles & Ratto, Marisa, 2008. "Relative performance of two simple incentive mechanisms in a public goods experiment," Journal of Public Economics, Elsevier, vol. 92(1-2), pages 54-90, February.
    15. Christiane Reif & Dirk Rübbelke & Andreas Löschel, 2017. "Improving Voluntary Public Good Provision Through a Non-governmental, Endogenous Matching Mechanism: Experimental Evidence," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 67(3), pages 559-589, July.
    16. Rübbelke, Dirk T.G., 2011. "International support of climate change policies in developing countries: Strategic, moral and fairness aspects," Ecological Economics, Elsevier, vol. 70(8), pages 1470-1480, June.
    17. Wolfgang Buchholz & Josef Falkinger & Dirk Rübbelke, 2014. "Non-Governmental Public Norm Enforcement in Large Societies as a Two-Stage Game of Voluntary Public Good Provision," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 16(6), pages 899-916, December.
    18. Dijkstra, Bouwe R. & Nentjes, Andries, 2020. "Pareto-Efficient Solutions for Shared Public Good Provision: Nash Bargaining versus Exchange-Matching-Lindahl," Resource and Energy Economics, Elsevier, vol. 61(C).
    19. Hans‐Peter Weikard, 2009. "Cartel Stability Under An Optimal Sharing Rule," Manchester School, University of Manchester, vol. 77(5), pages 575-593, September.
    20. Ansink, Erik & Weikard, Hans-Peter & Withagen, Cees, 2019. "International environmental agreements with support," Journal of Environmental Economics and Management, Elsevier, vol. 97(C), pages 241-252.

    More about this item

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:econom:v:81:y:2014:i:322:p:205-223. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/lsepsuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.