Multi-National Public Goods Provision under Multilateral Income Transfers & Productivity Differences
This paper examines multinational public goods provision under multilateral income transfers and productivity differences across countries. We assume the existence of a planner who uses linear approximation for utility maximization for all countries. The main findings are: (i) A country is an income receiver if it has an advantage in producing public goods; (ii) the planner country can determine the values of transfers for all countries with an adjustment cost; (iii) all countries obtain an identical level of utility; (iv) the country with the lowest adjustment cost is the best candidate for the planner country. All results are derived based on well-known information regarding the cost of producing the public goods and on income levels.
international public goods; multilateral income transfers; productivity difference; planner; adjustment cost; welfare
Faculty of Science & Engineering, Hosei University, Tokyo, Japan
Research Institute for Economics and Business Administration
Rokkodai-cho, Nada-ku, Kobe