In praise of inequality: public good provision and income distribution

Itaya, Jun‐ichi; Meza, David de; Myles, Gareth D.

doi:10.1016/s0165-1765(97)00179-1

Cited by 67 publications

(69 citation statements)

References 6 publications

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“…The one we explore in the lab has been relatively neglected so far. It is related to the effect of income redistribution on the provision of public goods (Itaya et al 1997). More precisely we test, in a stylized public good experiment, whether increasing income inequality also increases welfare.…”

Section: Equalizing Versus Unequalizing Redistributionmentioning

confidence: 99%

The trade-off between welfare and equality in a public good experiment

2015

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We report the results of an experiment on voluntary contributions to a public good in which we implement a redistribution of the group endowment among group members in a lump sum manner. We study the impact of redistribution on group contribution, on individuals’ contributions according to their endowment and on welfare. Our experimental results show that welfare increases when equality is broken, as predicted by theory (Itaya, De Meza & Myles, 1997), because the larger contribution of the rich subjects overcompensates the lower contribution of the poor subjects. Last but not least, agents’ behavior in situations of inequality of income, depends on initial conditions. In particular, the decisions of those who become poor seem to express a form of protest againts the new distribution of incomes: being poor is not the same thing as becoming poor

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Section: Equalizing Versus Unequalizing Redistributionmentioning

confidence: 99%

The trade-off between welfare and equality in a public good experiment

2015

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“…Additionally, neutrality does not apply if joint products are present and the redistribution is in the direction of those receiving a greater share of country-specific benefits. For a summation aggregator, public good provision may be augmented if richer recipients receive income transfers from non-contributors rather than spreading the transfers over a wider group of recipients (Itaya et al, 1997). Thus, RPGs in a developing area are best served by channelling income to the better-off countries that can then provide benefit spillovers regionwide.…”

Section: Aggregation Technology and New Directions In Givingmentioning

confidence: 99%

New face of development assistance: public goods and changing ethics

Sandler

Arce

2007

J of Intl Development

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This article indicates the policy implications of the increasing emphasis of public goods in foreign assistance. Even the Millennium Development Goals (MDGs) reflect this public good emphasis. This changing composition of aid has important ethical implications: public good aid is driven by altruism and self-interest owing to benefit spillovers to donor nations. We show how key properties of publicness influence not only the desired direction of income transfers, but also the identity of the appropriate donor (i.e. donor nation, multilateral agency, or charitable foundation). The article also highlights how the spatial spillovers of public goods affect aid decisions. Finally, we relate five essential sectors to their public good properties and policy implications. Copyright © 2007 John Wiley & Sons, Ltd.

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“…From the classics such as Hobbes (1651) or Schumpeter (1942) to moderns including Barzel (2002), Brennan and Buchanan (1977), Engineer (1989Engineer ( , 1991, Hillman and Ursprung (2000), Hirshleifer (1995), Karras (1996), Niskanen (1997), Olson (1982Olson ( , 1991Olson ( , 1993, Sandler (1992), Skaperdas (1992), and Wintrobe (1990Wintrobe ( , 1998, and recently Jos'e Antonio, Jennifer Gandhi, and James R. Vreeland (2010). 2 One line of research (Cornes andSandler 2000, Itaya andMyles, 1997) demonstrates contrary to the early M-O model that inequality of distribution by increasing voluntary public good provision as a substitute for benevolent government can benefi t everyone. Although the mechanism that produces this result differs from mine, it is consistent with our result.…”

Section: Introductionmentioning

confidence: 99%