Intergenerational redistribution is one of the major aims of national welfare states that have to prove their reliability in a world of internationally integrated goods and factor markets. In this paper, we analyse the conditions for the existence of steady-state equilibria and the (Pareto-)...

We develop a two-region model where the decentralized provision of spillover goods can be financed by means of taxes or user fees. In order to enforce the fees regions have to invest in exclusion. We show that a decentralized solution tends to be inefficient. There will be over-investment in...