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Inequality, Market Imperfections, and Collective Action Problems

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  • Pranab Bardhan and Maitreesh Ghatak.

Abstract

In this paper we analyze the effects of wealth inequality on the provision of public goods and management of common-property resources (CPR) when there are market imperfections in inputs that are complementary in production to the collective good. We show that for public goods inequality impedes efficiency, while for use of CPRs there is an inverse U-shaped relationship between inequality and efficiency. We discuss the implications of these theoretical results for redistributive policies such as land reform.

Suggested Citation

  • Pranab Bardhan and Maitreesh Ghatak., 1999. "Inequality, Market Imperfections, and Collective Action Problems," Center for International and Development Economics Research (CIDER) Working Papers C99-108, University of California at Berkeley.
    • Handle: RePEc:ucb:calbcd:c99-108
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    Cited by:

    1. Pranab Bardhan & Dilip Mookherjee, 1999. "Relative Capture of Local and Central Governments: An Essay in the Political Economy of Decentralization," Boston University - Institute for Economic Development 97, Boston University, Institute for Economic Development.
    2. Deininger, Klaus & May, Julian, 2000. "Can there be growth with equity : an initial assessment of land reform in South Africa," Policy Research Working Paper Series 2451, The World Bank.
    3. Deininger, Klaus & Yadav, Vandana, 2011. "Long-term Effects of Land Reform on Human Capital Accumulation: Evidence from West Bengal," WIDER Working Paper Series 082, World Institute for Development Economic Research (UNU-WIDER).
    4. Galiani, Sebastian & Hopenhayn, Hugo A., 2003. "Duration and risk of unemployment in Argentina," Journal of Development Economics, Elsevier, vol. 71(1), pages 199-212, June.
    5. Jeff Dayton-Johnson & Pranab Bardhan, 2002. "Inequality And Conservation On The Local Commons: A Theoretical Exercise," Economic Journal, Royal Economic Society, vol. 112(481), pages 577-602, July.
    6. La Ferrara, Eliana, 2002. "Inequality and group participation: theory and evidence from rural Tanzania," Journal of Public Economics, Elsevier, vol. 85(2), pages 235-273, August.
    7. Klaus W. Deininger & Songqing Jin & Vandana Yadav, 2011. "Long-term Effects of Land Reform on Human Capital Accumulation: Evidence from West Bengal," WIDER Working Paper Series wp-2011-082, World Institute for Development Economic Research (UNU-WIDER).
    8. K. Deininger & S. Jin & H. K. Nagarajan, 2009. "Land Reforms, Poverty Reduction, and Economic Growth: Evidence from India," Journal of Development Studies, Taylor & Francis Journals, vol. 45(4), pages 496-521.
    9. Baland, Jean-Marie & Platteau, Jean-Philippe, 2003. "Economics of common property management regimes," Handbook of Environmental Economics, in: K. G. Mäler & J. R. Vincent (ed.), Handbook of Environmental Economics, edition 1, volume 1, chapter 4, pages 127-190, Elsevier.
    10. Deininger, Klaus W. & Jin, Songqing & Yadav, Vandana, 2008. "Impact of Land Reform on Productivity, Land Value and Human Capital Investment: Household Level Evidence from West Bengal," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6277, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

    More about this item

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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