Inter-city Migration and Policy
نویسنده
چکیده
The seminal Buchanan-Ng club model is used to analyze optimal allocation of population between non-homogenous cities. Because of externalities (marginal welfare effects), migration cannot alone ensure efficiency and policy intervention is needed. In principle, a first-best optimum is achievable, if the externalities are properly calculated and internalized to people’s decisions by local or centralized policy. Yet, implementation of these policies is not so straightforward in practice. Consolidation of central and local policies based on average welfare is more promising. In club theoretic terms, the main finding is that total-economy viewed policy making is not necessary to evoke Pareto efficiency even when the number of clubs is fixed. In other words, neither Pigouvian policy instruments nor Coasian bargaining is needed to reach the first-best optimum.
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