CFDP 2278

Kant and Lindahl

Author(s): 

Publication Date: March 2021

Pages: 39

Abstract: 

Wicksell (1896) and Lindahl (1919) analyzed the public provision of public goods through parliamentary negotiation. Roemer (2010, 2019) applied Kant’s (1785) categorical imperative to the private provision of public goods by voluntary contributions. They coincide in yielding efficient outcomes. Our focal equilibrium notions are the Multiplicative Kantian Equilibrium in the Kant-Roemer modelling and the Balanced Linear Cost Share Equilibrium for the Wicksell-Lindahl approach. It turns out that both are defined by the same individual optimization problem, and that costs are distributed according to marginal valuation, what we call the Lindahl Ratio. More general versions of the Wicksell-Lindahl and Kant-Roemer models depart from the Lindahl Ratio in ways that can be interpreted in terms of private property rights on the technology.

Keywords: Public goods, Public provision, Private Provision, Voluntary contributions, Wicksell, Lindahl, Kant, Categorical imperative

JEL Classification Codes: H0, H2, H4, C3, C5, C7, B1, B2, B3

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