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The Exploitation Hypothesis in a Public Good Economy: Some Extensions

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  • Wolfgang Buchholz
  • Todd Sandler

Abstract

Since Olson’s (1965) The Logic of Collective Action, the exploitation hypothesis, in which the rich shoulders the provision burden of public goods for the poor, has held sway despite empirical exceptions. To address such exceptions, we establish two alternative exploitation hypotheses based on asymmetric preferences or on productivity differences regarding the public good. The classic hypothesis and its two variants are proven in a novel fashion. Our theoretical insights are then illustrated by some empirical examples from the field of international public goods, such as military defence and cross-border pollution.

Suggested Citation

  • Wolfgang Buchholz & Todd Sandler, 2016. "The Exploitation Hypothesis in a Public Good Economy: Some Extensions," CESifo Working Paper Series 5717, CESifo.
    • Handle: RePEc:ces:ceswps:_5717
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    References listed on IDEAS

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    1. Toshihiro Ihori & Martin McGuire & Shintaro Nakagawa, 2014. "International Security, Multiple Public Good Provisions, and The Exploitation Hypothesis," Defence and Peace Economics, Taylor & Francis Journals, vol. 25(3), pages 213-229, June.
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    6. Sandler,Todd, 2004. "Global Collective Action," Cambridge Books, Cambridge University Press, number 9780521834773, November.
    7. 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.
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    9. Boadway, Robin & Hayashi, Masayoshi, 1999. "Country size and the voluntary provision of international public goods," European Journal of Political Economy, Elsevier, vol. 15(4), pages 619-638, November.
    10. Todd Sandler, 2015. "Collective action: fifty years later," Public Choice, Springer, vol. 164(3), pages 195-216, September.
    11. Sandler,Todd, 2004. "Global Collective Action," Cambridge Books, Cambridge University Press, number 9780521542548, November.
    12. Andreoni, James, 1988. "Privately provided public goods in a large economy: The limits of altruism," Journal of Public Economics, Elsevier, vol. 35(1), pages 57-73, February.
    13. Hirofumi Shimizu & Todd Sandler, 2003. "NATO Peacekeeping and Burden Sharing: 1994-2000," Public Finance Review, , vol. 31(2), pages 123-143, March.
    14. Andreoni, James & McGuire, Martin C., 1993. "Identifying the free riders : A simple algorithm for determining who will contribute to a public good," Journal of Public Economics, Elsevier, vol. 51(3), pages 447-454, July.
    15. Fraser, Clive D., 1992. "The uniqueness of Nash equilibrium in the private provision of public goods : An alternative proof," Journal of Public Economics, Elsevier, vol. 49(3), pages 389-390, December.
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    Cited by:

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    More about this item

    Keywords

    public goods; exploitation hypothesis;

    JEL classification:

    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods

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