Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/217034 
Authors: 
Year of Publication: 
2020
Series/Report no.: 
CESifo Working Paper No. 8283
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
Every government that controls an exhaustible resource must decide whether to exploit it or to conserve and thereby let the subsequent government decide whether to exploit or conserve. This paper develops a theory of this situation and shows when a small probability that some future government will exploit a resource leads to a domino effect with rapid exploitation. This effect leads to a multiplier that measures how a small change in parameters can have large effects. The multiplier is especially large if the government is powerful now but unlikely to be in power later. The multiplier also permits dramatic returns on lobby contributions contingent on exploitation -- or on compensations contingent on conservation -- when these offers are expected to continue. To best take advantage of the multiplier, I show how and when compensations should be offered to the president, the party in power, the general public, or to the lobby group.
Subjects: 
dynamic games
exhaustible resources
deforestation
political economy
lobbying
conservation
PES
REDD+.
JEL: 
D72
C73
Q57
O13
Document Type: 
Working Paper
Appears in Collections:

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.