INTERNATIONAL PUBLIC-GOODS AND CONTRIBUTION PRODUCTIVITY DIFFERENTIALS

This paper investigates the impacts of productivity differentials in c ontributing to the public good on national welfare in the context of n on-cooperative voluntary provision of a pure public good. A country wi th high productivity does not necessarily enjoy high welfare. Subsidiz ing the other country in a contribution game may lead to a strong para doxical result, while a lump-sum transfer will lead to a weak paradoxi cal result. We also explore the relationship between the price of the public good and the size of an open club in a multi-club model.