Effects of technology transfers on the provision of public goods

In this paper, we examine the viability of cooperative policies oriented to the resolution of transboundary pollution problems using the theory of pri vate provision of public goods in a two-country model. We analyze the effec ts on economic welfare of voluntary technological transfers oriented to red ucing the emission of pollutants. Our analysis shows that when the atmosphere is taken as a pure public goods , "a strong paradox'' emerges: the advanced country, in spite of the transf er, sees its economic welfare improved while the developing country sees it worsen. Moreover, if both a technical and an income transfer occur, this p aradox might not be solved. Furthermore, "a paradoxical improvement'' occur s when the advanced country does not take any policy towards the environmen t but the developing country does: an improvement in the level of technolog y in the developing country allows for an expansion of the level of utility in both countries. On the other hand, in the case where the atmosphere is taken as an impure public goods, when both countries pursue an abatement po licy, the transfer of technology leads to an improvement in welfare in both countries.