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On cooperation in Musgravian models of externalities within a federation

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  • TULKENS, Henry

Abstract

"Musgravian" externalities, formulated and illustrated by Musgrave in a 1966 paper on "social goods" are seen in this paper as one form of the interactions that occur between the components of a federation. The original formal apparatus is first exposed briefly. In that context, it is then considered whether and how alternative forms of federal structures are likely to achieve efficiency. Following suggestions from the literature, three such forms are dealt with: "planned", "cooperative" and "majority rule" federalisms. Next, the relevance of non cooperative equilibria is examined, in the light of an interpretation of them as "fall back" positions when disagreement occurs among members of a federation. Finally, the question is evoked of what economics and public finance may have to say on the limits to institutional decentralization, i.e. on the choice between federal, confederal and secessional structures. The paper concludes with a reminder of Musgrave's view on this issue.
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Suggested Citation

  • TULKENS, Henry, 2003. "On cooperation in Musgravian models of externalities within a federation," LIDAM Reprints CORE 1644, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvrp:1644
    Note: In : S. Cnossen and H.-W. Sinn (eds.), Public Finance and Public Policy in the New Century. Cambridge, The MIT Press, 451-463, 2003
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    1. Parkash Chander & Henry Tulkens, 2006. "The Core of an Economy with Multilateral Environmental Externalities," Springer Books, in: Parkash Chander & Jacques Drèze & C. Knox Lovell & Jack Mintz (ed.), Public goods, environmental externalities and fiscal competition, chapter 0, pages 153-175, Springer.
    2. Henry Tulkens, 2006. "Dynamic Processes for Public Goods: An Institution-Oriented Survey," Springer Books, in: Parkash Chander & Jacques Drèze & C. Knox Lovell & Jack Mintz (ed.), Public goods, environmental externalities and fiscal competition, chapter 0, pages 9-48, Springer.
    3. Frederick Ploeg & Aart Zeeuw, 1992. "International aspects of pollution control," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 2(2), pages 117-139, March.
    4. 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.
    5. Parkash Chander & Henry Tulkens, 2006. "A Core-Theoretic Solution for the Design of Cooperative Agreements on Transfrontier Pollution," Springer Books, in: Parkash Chander & Jacques Drèze & C. Knox Lovell & Jack Mintz (ed.), Public goods, environmental externalities and fiscal competition, chapter 0, pages 176-193, Springer.
    6. Elinor Ostrom, 2000. "Collective Action and the Evolution of Social Norms," Journal of Economic Perspectives, American Economic Association, vol. 14(3), pages 137-158, Summer.
    7. J. H. Dreze & D. de la Vallee Poussin, 1971. "A Tâtonnement Process for Public Goods," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 38(2), pages 133-150.
    8. GERMAIN, Marc & TOINT, Philippe & TULKENS, Henry, 1995. "International Negotiations on Acid Rains in Northern Europe : A Discrete Time Iterative Process," LIDAM Discussion Papers CORE 1995056, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    9. Frederick Ploeg & Aart Zeeuw, 1992. "International aspects of pollution control," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 2(2), pages 117-139, March.
    10. GERMAIN, Marc & TOINT, Philippe & TULKENS, Henry & DE ZEEUW, Aart, 1998. "Transfers to sustain core-theoretic cooperation in international stock pollutant control," LIDAM Discussion Papers CORE 1998032, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    11. Richard A. Musgrave, 1997. "Devolution, Grants, and Fiscal Competition," Journal of Economic Perspectives, American Economic Association, vol. 11(4), pages 65-72, Fall.
    12. Robert P. Inman & Daniel L. Rubinfeld, 1997. "Rethinking Federalism," Journal of Economic Perspectives, American Economic Association, vol. 11(4), pages 43-64, Fall.
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