Asymmetric impacts and over-provision of public goods

Louis-Gaëtan Giraudet (1) , Céline Guivarch (1)

1 CIRED - centre international de recherche sur l'environnement et le développement

We elicit simple conditions for an old puzzle -- over-provision of a public good. An asymmetric public good that benefits some contributors while harming others is subject to both free riding and free driving. Even though aggregate impacts are net positive, it can be over-provided if free drivers face provision costs that are sufficiently lower than free riders'. Asymmetric impacts further impose restrictions on Hicks-Kaldor improvements. We establish these results in a parsimonious model that can easily be applied to a variety of so-called NIMBY problems, for instance new public infrastructures and global warming mitigation.

Mots clés: public good; externalities; free riding; free driving; NIMBY; global warming

Domaines: Environnement et Société; Economies et finances

Louis-Gaëtan Giraudet, Céline Guivarch. Asymmetric impacts and over-provision of public goods. 2018. ⟨hal-01960318⟩