Real inequality in Europe since 1500

Introducing a concept of real, as opposed to nominal, inequality of income or wealth suggests some historical reinterpretations, buttressed by a closer look at consumption by the rich. The purchasing powers of different income classes depend on how relative prices move. Relative prices affected real inequality more strongly in earlier centuries than in the twentieth. Between 1500 and about 1800, staple food and fuels became dearer, while luxury goods, especially servants, became cheaper, greatly widening the inequality of lifestyles. Peace, industrialization, and globalization reversed this inegalitarian price effect in the nineteenth century, at least for England

Climate change policy and burden sharing in the European Union: applying alternative equity rules to a CGE-framework

The objective of this paper is to present different equity rules that can be applied to the initial allocation of greenhouse gas entitlements and to analyse the potential impacts of these rules EU-wide as well as on the level of member states. The methodological framework used in the empirical part of the paper is based on the GEM-E3 model, a multi-country and multi-sectoral computable general equilibrium model for fourteen EU-member states. The major finding of the paper is that being ex ante favoured with respect to the initial allocation of permits might not hold ex post, i.e. when trade of permits and actual emission reductions are carried out. The reason can be found in two effects. First, the interdependence of the EU economies allows smaller economies not to make full use of the advantages they get through the ability-to-pay allocation: The negative impact on the economic perfomance of the big economies leads to a drop of export demand in the smaller economies, which in turn lowers the expected positive impact on welfare in the latter ones. Second, the way of how a surplus of permits in a particular country is used has considerable impacts on consumer welfare. Selling the surplus of permits on the international market and use the receipts to reduce public deficit is one way, but it has no direct impact on demand. Other, more demand stimulating recycling strategies of the surplus (e.g. a lump-sum transfer to households) might be more promising if welfare losses are to be minimzed. Both effects may outweigh the positive effect realized ex ante in some countries due to a more ?fair? initial allocation of permits. The outcome emphasizes the importance of a consideration of full general equilibrium effects across countries. --

Global Climate Change and the Equity-Efficiency Puzzle

There is a broad consensus that the costs of abatement of global climate change can be reduced efficiently through the assignment of quota rights, and through international trade in these rights. But there is no consensus on whether the initial assignment of emission permits can affect the Pareto-optimal global level of abatement. This paper provides some insight into the equity-efficiency puzzle. Qualitative results are obtained from a small-scale model, and then quantitative evidence of separability is obtained from MERGE, a multi-region integrated assessment model. It is shown that if all the costs of climate change can be expressed in terms of GDP losses, Pareto-efficient abatement strategies are independent of the initial allocation of emission rights. This is the case sometimes described as "market damages". If, however, different regions assign different values to non-market damages such as species losses, different sharing rules may affect the Pareto-optimal level of greenhouse gas abatement. Separability may then be demonstrated only in specific cases (e.g. identical welfare functions or quasi-linearity of preferences or small shares of wealth devoted to abatement)International climate policy; Global climate change

A concern about low relative income, and the alignment of utilitarianism with egalitarianism

A utilitarian social planner who maximizes social welfare assigns the available income to those who are most efficient in converting income into utility. However, when individuals are concerned about their income falling behind the incomes of others, the optimal income distribution under utilitarianism is equality of incomes.Utilitarianism, Income equality, Social welfare maximization, Relative income, Labor and Human Capital, H0, I0, I30, I31,

Why Status Effects Need not Justify Egalitarian Income Policy

Economic research overwhelmingly shows that the utility individuals derive from their income depends on the incomes of others. Theoretical literature has proven that these status effects imply a more egalitarian income policy than in the conventional case, in which people value their income independently from the income of others. This article qualifies this conclusion in three ways. First, this policy implication holds if low income groups are sensitive to status, but not if high income groups are predominantly so. Neither do status effects provide an economic rational for egalitarian income policy if they only pertain to peer groups with similar income levels. Third, if status effects are grounded in vices like envy, jealousy, grudgingness or spite, a moral basis for egalitarian income policy is lacking, because distributive justice cannot be based on perverse preferences.relative income;positional goods;optimal taxation;egalitarian income policy;redistribution;status effects;envy

A pluralistic approach to global poverty

A large proportion of humankind today lives in avoidable poverty. This article examines whether affluent individuals and governments have moral duties to change this situation. It is maintained that an alternative to the familiar accounts of transdomestic distributive justice and personal ethics put forward by writers such as Peter Singer, John Rawls, and Thomas Pogge is required, since each of these accounts fails to reflect the full range of relevant considerations. A better account would give some weight to overall utility, the condition of the worst off, and individual responsibility. This approach provides robust support to global poverty alleviation

Cohort change, diffusion, and support for gender egalitarianism in cross-national perspective

Arguments about the spread of gender egalitarian values through a population highlight several sources of change. First, structural arguments point to increases in the proportion of women with high education, jobs with good pay, commitment to careers outside the family, and direct interests in gender equality. Second, value-shift arguments contend that gender norms change with economic affluence among women and men in diverse positions—at all levels of education, for example. Third, diffusion arguments suggest that structural changes lead to adoption of new ideas and values supportive of gender equality by innovative, high-education groups, but that the new ideas later diffuse to other groups. This study tests these arguments by using International Social Survey Program surveys in 1988, 1994, and 2002 for 19 nations to examine gender egalitarianism across 85 cohorts born from roughly 1900 to 1984. Multilevel models support diffusion arguments by demonstrating that the effects of education first strengthen with early adoption of gender egalitarianism and then weaken as other groups come to accept the same views. However, the evidence of a sequence of divergence and convergence in educational differences across cohorts appears most clearly for women in Western nations.cohort, diffusion, education, gender, gender equality, ISSP

When international organizations bargain: evidence from the global environment facility

Who gets what in bargaining between states and international organizations (IOs)? Although distributional conflict is unavoidable in international cooperation, previous research provides few empirical insights into the determinants of bargaining outcomes. We test a simple bargaining model of cooperation between states and IOs. We expect that nonegalitarian international organizations, such as the World Bank, secure more gains from bargaining with economically weak than with economically powerful states. For egalitarian international organizations, such as most United Nations (UN) agencies, the state’s economic power should be less important. We test these hypotheses against a novel data set on funding shares for 2,255 projects implemented under the auspices of the Global Environment Facility, from1991 to 2011. The data allow us to directly measure bargaining outcomes. The results highlight the importance of accounting for the interactive effects of international organization and state characteristics

The Egalitarian Sharing Rule in Provision of Public Projects

In this note we consider a society that partitions itself into disjoint jurisdictions, each choosing a location of its public project and a taxation scheme to finance it. The set of public project is multi-dimensional, and their costs could vary from jurisdiction to jurisdiction. We impose two principles, egalitarianism, that requires the equalization of the total cost for all agents in the same jurisdiction, and efficiency, that implies the minimization of the aggregate total cost within jurisdiction. We show that these two principles always yield a core-stable partition but a Nash stable partition may fail to exist.Jurisdictions, Stable partitions, Public projects, Egalitarianism

Improving the Measurement of Human Development

We propose a new Human Development Index that involves a number of changes with respect to the present one, even though it keeps the basic structure of the index (namely, preserving “health”, “education” and “material wellbeing” as the three basic dimensions of human development). The first change refers to the substitution of the arithmetic mean by the geometric mean, as a way of aggregating the different dimensions in a more sensible way. The second one leads to the introduction of distributive considerations in the evaluation of material wellbeing. The last change consists of the introduction of new variables to approach health and education, looking for a higher sensitivity of the index with respect to the differences between countries. These new variables are specially indicated for the analysis of human development in highly developed countries. Besides the conceptual discussion, that includes a characterization of the chosen aggregation formula, we present a comparative analysis of this new index and the standard one, focusing on the OECD countries.Human Development, multiplicative indices, distributive concerns, highly developed countries, HDI