We propose a simple mechanism providing incentives to reduce harmful emissions to their efficient level without infracting upon productive efficiency. The mechanism employs a contest creating incentives among participating nations to simultaneously exert efficient productive and efficient...

The stabilisation of GHG atmospheric concentrations at levels expected to prevent dangerous climate change has become an important, global, long-term objective. It is therefore crucial to identify a cost-effective way to achieve this objective. In this paper we use WITCH, a hybrid...

This paper elaborates on the recent race to sequence the human genome. Starting from the debate on public vs. private research arising from the genome case, the paper shows that in some fundamental research areas, where knowledge externalities play an important role, market and non-market...

Using a new data set on Swiss state and local governments from 1890 to today, we analyze how the adoption of proportional representation affects fiscal policy. We show that proportional systems shift spending toward broad goods (e.g. education and welfare benefits) but decrease spending on...

Museums have many different goals beyond efficiency such as social equity, financial revenue, attracting donors and gaining international, regional or local prestige. Various pricing schemes are being discussed with the aim of reaching these goals. The classical ones are entry prices and free...

We develop a simple model of fiscal competition among ageing municipalities. When ageing advances, gerontocracies and social planners gradually substitute publicly provided goods aimed at the mobile young population for publicly provided goods for the elderly. Thissubstitution process does not...

This paper examines the consequences of creating a fully competitive market in a sector previously dominated by a cost-minimising public firm. Workers in the economy are heterogeneous in their motivation to work in the sector. In line with empirical findings, our model implies that firms in the...

Thomas Friedman has argued in The World is Flat that those who deny rapid globalization will not survive in the global economy. First, we critically discuss Friedman’s views and highlight the new globalization driven by outsourcing and vertical specialization. Second, we argue that Friedman...

This paper develops a Mirrlees (1971) framework with heterogeneous agents to analyze optimal redistributive taxes, optimal provision of public goods and the marginal cost of public funds (MCF). Standard MCF measures are shown to suffer from three defects: i) The MCF for the (non-individualized)...

In this paper we examine the potential of democratic constitutions for the provision of divisible public goods in a large economy. Our main insights are as follows: When aggregate shocks are absent, the combination of the following rules yields first-best allocations: a supermajority rule, equal...