FEEM Seminar on “United we stand, divided we win. Strategic decentralization and the provision of global public goods”
This paper studies strategic decentralization in the provision of global public goods, such as climate. The authors show that a coalition, with the aim of maximizing the aggregate payoff of its members, may find it strategically advantageous to decentralize its provision, so that members act autonomously to maximize their own payoff. This may be particularly relevant for climate negotiations, because two active coalitions may provide less public goods than a world with only the largest coalition and a group of free-riding countries.