INTER-CITY MIGRATION AND POLICY
Laurila, Hannu (2010)
2010
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Julkaisun pysyvä osoite on
https://urn.fi/urn:isbn:978-951-44-8277-9
https://urn.fi/urn:isbn:978-951-44-8277-9
Tiivistelmä
The seminal Buchanan-Ng club model is used to analyze optimal allocation ofpopulation between non-homogenous cities. Because of externalities (marginal welfareeffects), migration cannot alone ensure efficiency and policy intervention is needed.
Inprinciple, a first-best optimum is achievable, if the externalities are properly calculatedand internalized to people's decisions by local or centralized policy. Yet, implementationof these policies is not so straightforward in practice. Consolidation of central and localpolicies based on average welfare is more promising. In club theoretic terms, the mainfinding is that total-economy viewed policy making is not necessary to evoke Paretoefficiency even when the number of clubs is fixed. In other words, neither Pigouvianpolicy instruments nor Coasian bargaining is needed to reach the first-best optimum.
Inprinciple, a first-best optimum is achievable, if the externalities are properly calculatedand internalized to people's decisions by local or centralized policy. Yet, implementationof these policies is not so straightforward in practice. Consolidation of central and localpolicies based on average welfare is more promising. In club theoretic terms, the mainfinding is that total-economy viewed policy making is not necessary to evoke Paretoefficiency even when the number of clubs is fixed. In other words, neither Pigouvianpolicy instruments nor Coasian bargaining is needed to reach the first-best optimum.