Specialized theoretical and empirical research should in principle be embedded in a unified framework that identifies the relevant interactions among different phenomena, enables an appropriate matching of policy instruments to objectives, and grounds normative analysis in individuals' utilities...

In an environment with asymmetric information the implementation of a first-best efficient Clarke-Groves-Vickrey (D?Aspremont-Gérard-Varet) mechanism may not be feasible if it has to be self-financing. By using intergenerational transfers, the arising budget deficit can generally be covered in...

Governments often aim to influence the amount and sectoral allocation of private investments through explicit or implicit subsidies. The rules used to select projects to benefit from subsidies may vary, depending on the policy objective. This paper develops a general framework to allocate...

The aim of this paper is to present an alternative methodology for discounting far distant future externalities genereted by an investment project: time-declining discount rates. First I present the experimental evidence on individuals' time-inconsistency. Second I consider the theoretical...

We consider international negotiations on the level of global pollution, and examine the Lindahl solution which determines the distribution of the pollution permits with unanimous agreement. We show various properties to clarify difficulties to achieve a Pareto efficient allocation as an...

A framework is proposed to subsume public goods and common-pool resources, respectively, as specific cases of positive and negative externalities. A pure public good is a positive externality whose appropriable benefits are too small or too uncertain relative to the high private cost for anyone...

The scope of public human resource policy is outlined. Motivation for the need of transparency in this policy is provided in terms of informational asymmetries, human capital externalities, and long planning horizons. Transparency is defined both along a time dimension - ex ante and ex post -...

We consider international negotiations on the level of global pollution, and examine the Lindahl solution which determines the distribution of the pollution permits with unanimous agreement. We show various properties to clarify difficulties to achieve a Pareto efficient allocation as an...

A substantial literature examines second-best environmental policy, focusing particularly on how the Pigouvian directive that marginal taxes should equal marginal external harms needs to be modified in light of the preexisting distortion due to labor income taxation. Additional literature is...

Pigou (1920) advocated for taxes, set equal to marginal damages, on goods produced and consumed that involve negative externalities. Samuelson (1954) laid out the conditions for optimal pure public goods provision, but noted that free-riding (the “demand revelation” problem) was likely to...