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Global public economics : public goods and externalities

Sandmo, Agnar
Working paper
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URI
http://hdl.handle.net/11250/163080
Date
2006-10
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  • Discussion papers (SAM) [582]
Abstract
This paper extends the normative analysis of public goods and externalities to an international

setting. The first part considers the optimal allocation of a global public good. Whether global

production efficiency is desirable depends on the existence of international lump sum

transfers; in the absence of such transfers and with an egalitarian social welfare function a

poor country should bear less of the burden of producing global public goods than implied by

production efficiency. The second part of the paper analyzes global externalities and shows that internationally uniform Pigouvian taxation is only optimal in the presence of ideal lump sum transfers.
Publisher
Norwegian School of Economics and Business Administration. Department of Economics
Series
Discussion paper
2006:32

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