UPA Perpustakaan Universitas Jember

Combining rights and welfarism: a new approach to intertemporal evaluation of social alternatives

Ngo Van Long - Personal Name
Vincent Martinet3 - Personal Name

We propose a new criterion reflecting both the concern for rights and the
concern for welfare in the evaluation of economic development paths. The concern for
rights is captured by a pre-ordering over combinations of thresholds corresponding to
floors or ceilings on various quantitative indicators. The resulting constraints on actions
and on levels of state variables are interpreted as minimal rights to be guaranteed to
all generations, for intergenerational equity purposes. The level of these rights are
endogenously chosen, accounting for the “cost in terms of welfare” of granting them.
Such a criterion could embody the idea of sustainable development. We provide an
axiomatization of such a criterion and characterize the tension between rights and
welfare in a general economic framework. We apply the criterion to the standard
Dasgupta–Heal–Solow model of resource extraction and capital accumulation. We
show that if the weight given to rights in the criterion is sufficiently high, the optimal
solution is on the threshold possibility frontier. The development path is then “driven”
by the rights. In particular, if a minimal consumption is considered as a right, constant
consumption can be optimal even with a positive utility discount rate. In this case, the
shadow value of the right plays an important role in the determination of the rate of
discount to be applied to social investment projects.

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to intertemporal evaluation of social alternatives

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NPP. 3509212D1000001

Combining rights and welfarism: a new approach to intertemporal evaluation of social alternatives

Ngo Van Long - Personal NameVincent Martinet3 - Personal Name

Series Title

Call Number

Publisher

Collation

Language

ISBN/ISSN

Classification

Content Type

Media Type

Carrier Type

Edition

Subject(s)

Specific Detail Info

Statement of Responsibility

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Ngo Van Long - Personal Name
Vincent Martinet3 - Personal Name