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Too Different To Get Along: Inequality and Global Public Goods

Author

Listed:
  • Margherita Bellanca

    (Department of Environmental Sciences, Informatics and Statistics, Ca' Foscari University of Venice)

  • Alessandro Spiganti

    (Ca' Foscari University of Venice; RFF-CMCCEuropean Institute on Economics and the Environment (EIEE), Centro Euro-Mediterraneo sui Cambiamenti Climatici, Italy)

Abstract
We study how inequality affects the feasibility of an international agreement on the provision of an environmental public good in a two-country two-level political economy model. At the international level, two negotiators try to agree on the respective country's provision of the public good under different international equity rules, knowing that this agreement will need to be accepted by the median voter in each country. At the national level, agents' preferences for the public good depend on their relative income position, which implies that negotiators must also take into account the level of inequality within their country. We show that the feasibility of the agreement and the distribution of the gains from cooperation depends on the equity rule imposed, on the levels of within-country inequality, and on the level of cross-country inequality.

Suggested Citation

  • Margherita Bellanca & Alessandro Spiganti, 2023. "Too Different To Get Along: Inequality and Global Public Goods," Working Papers 2023: 10, Department of Economics, University of Venice "Ca' Foscari".
    • Handle: RePEc:ven:wpaper:2023:10
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    References listed on IDEAS

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    More about this item

    Keywords

    Equity Rules; Environmental Public Goods; Median Voter; Public Support; Relative Income Hypothesis;
    All these keywords.

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism

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