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He is currently one of the editors of the Cambridge University Press journal Economics and Philosophy. Professor Maniquet was recently awarded the Francqui Prize, the highest scientific distinction in Belgium. A Theory of Fairness and Social Welfare. The definition and measurement of social welfare have been a vexed issue for the past century.

The poll finds strong support for asking the long term unemployed to do community work in return for their benefits, and also support for a cap on child benefit. Reducing unemployment and cutting taxes on low earners are seen as the most important steps to a fairer Britain. RichardWalton20 covers what powers the police have. Read the report here policyexchange.

What should be the responsibility of government?

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The alternative horn of the dilemma is to impose a uniform index to all individuals, independently of their own prefer- ences, but this index necessarily involves a special view on the relative impor- tance of the various dimensions of advantage, and this seems akin to imposing a perfectionist view of the good. This is another position which these theories definitely want to avoid. There are many other topics from the philosophical literature that will be touched upon here. As announced above, an important theme in this book is the selection of an appropriate reward principle for the apportionment of personal outcomes to personal responsibility.

Remaining agnostic on the reward principle is not a possibility, if only because this would condemn responsibility-sensitive egalitar- ianism to impotence on many practical issues, since the choice of particular policies will often necessarily embody special responses to this problem. In fact, the concept of responsibility itself suggests one or maybe two plausible reward principles.

The quotations of Arneson and Cohen above were clearly in this vein.


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As a result, responsibility-sensitive egalitarianism then appears as a middle way between outcome egalitarianism and libertarianism. This approach is more or less explicitly suggested by most of the philo- sophical literature. This alternative reward prin- ciple then legitimizes redistribution above and beyond what is required by the compensation principle in order to enhance the global outcome of individuals similarly situated with respect to circumstances. For instance, in the example introduced above of individuals receiving bequests and managing them more or less well, a policy granting greater transfers to those who manage well would be adopted because this would increase total final wealth among any subgroup receiving the same bequest.

In one direction of research, Roemer and Van de gaer have proposed combinations of the maximin and the utilitarian so- 1 8 An exception is Voorhoeve This line of analysis thus embraces the utilitarian reward principle briefly described above. A central message of this book is that this divide, which seems to have gone largely unnoticed in the philosophical literature, should attract much more attention. The social welfare functions proposed by the utilitarian branch made it possible to rank all allocations in any context, so that they could be used in the evaluation of any kind of social policy.

This is what is called the first-best context, as opposed to the second-best context in which lack of information about individuals makes it harder for the authorities to redistribute appropriately. None of the initial publications makes a case for adopting a particular reward principle as opposed to the other. Roemer , Roemer et al.

This extension has since then been made,28 and will be presented and further refined below. As a result, we now have a variety of operational social criteria, for each of the two branches and for any context of application. It makes it possible to compare the implications of the various relevant ethical principles with substantial precision. Outline of the book The book starts by examining the simple context in which there is a well-defined process determining individual well-being as a function of personal characteris- tics and money.

These characteristics are fixed and are separated into circum- stances for which individuals are not responsible and responsibility character- istics. Redistribution operates through transfers of money. This very simple framework is quite useful in order to analyze the basic structure of solutions in a simple way, and many of the concepts and qualitative results obtained with it carry over to the more complex settings studied in the sequel.

It is the topic of the first two chapters. Among the complexities introduced later on, from Chapter 3 to 5, are incen- tive issues, arising when imperfect information about individual characteristics and choices constrains redistributive policies, and multi-dimensional redistribu- tion involving several goods, as in certain forms of in-kind transfers.

The link between incentives and responsibility is quite interesting to analyze because, as one may guess, incentive constraints typically force public policies, to some extent, to let individual agents bear the consequences of their choices, which is akin to implementing liberal responsibility principles. This particular setting is given a rather detailed scrutiny in Chapters 4 and 5, due to its practical importance and central place in redistributive policies.

Income redistribution is also a key topic in public economics, and incorporating fairness notions in the definition of social objectives makes it possible to obtain more precise conclusions about optimal policies than with general unspecified social welfare functions. Individuals are typically not responsible for being lucky or unlucky, but they may expose 2 8 In particular in Bossert et al. Dworkin has proposed a famous but contentious distinction between brute luck for which individuals are not responsible and option luck for which they are , and this chapter examines whether one can make sense of it.

It turns out that the concepts developed in the first chapters are quite useful for shedding light on this issue. Chapter 7 examines a particular variant of the incentive problem that has to do with the possibility for individuals to regret their past decisions and to request help in order to alleviate their regret. In a hard-hearted version of responsibility-sensitive egalitarianism their plight does not call for any particular concern, but it can be argued that individuals who change their mind need not bear the consequences of their past decisions for all their lives.

These first chapters focus on the liberal approach to reward, which is closer to the commonsense understanding of the distributive implications of respon- sibility and also closer to philosophical formulations of the ideal of equality of resources or opportunities. A description of the various op- tions available in this approach and of the underlying ethical issues is followed by a comparison with the solutions put forth by the liberal approach.

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The criteria studied in all these chapters take a global perspective on social evaluation, but one is sometimes interested in a partial aspect of distributions, such as the degree of inequality of opportunities, for instance , or the degree of social mobility from one generation to another. Such notions are examined in Chapter 9, with a variety of approaches and indices being scrutinized.

As this outline makes clear, the bulk of the book is about analyses coming from economics, and a central goal here is to make this material available in a synthetic, convenient way for economists, and in an accessible form to philoso- phers as well. The hope is in particular that some insights obtained in economic analysis may be helpful to the formulation of philosophical theories of justice and may even provide new concepts and additional topics for philosophical ques- tioning.

Meanwhile, in the direction of economists, the hope is also to make the recent theories of justice and the notion of responsibility more familiar and more easily applicable in the discussion of public policies. It is indeed valuable to develop a conceptual apparatus that is flexible enough to apply various conceptions of the responsibility sphere. Some discussions on the philosophical issue of defining the scope of personal responsibility appear in various chapters, especially Chapters 3, 6 and 7, but a complete examination of this deep issue is postponed to the last chapter.

Optimal Income Taxation Theory and Principles of Fairness

It also examines how the value of freedom is connected to personal responsibility. The separation is made here in sections. The separation of formal sections from the main text entails some repetitions for the mathematically-oriented reader, who will find the general explanations and motivations separated from the formal definitions and results.

But hopefully the disruption is limited, and the proximity of formal sections to their non-formal counterparts makes this acceptable. In the formal and non-formal parts alike, the text introduces conditions axioms that embody the various fairness principles studied in this book. By searching their name e. The set of real resp. An ordering is a binary relation that is reflexive and transitive. One is the compensation principle, and the other is the liberal reward principle. The chapter discusses the foundations of such principles and conditions as well as the logical links between the conditions in a simple framework.

It also extends the analysis to more general situations in which no natural solution is immediately apparent. The framework of analysis for this chapter and the next is the simplest con- text possible. In this special context it is assumed that individuals have personal characteristics which are fixed and that a clear distinction separates character- istics for which they are responsible and characteristics for which they are not responsible.

The assumption that characteristics are fixed is made so that no incentive issue arises in relation to a possible influence of redistribution over per- sonal characteristics this topic will be dealt with in a later chapter. As far as the separation of responsibility characteristics from other characteristics is con- cerned, its basis need not be elucidated here. We will focus here not on this problem, which will be addressed at the end of the book, but on the distributive consequences of attributing re- sponsibility to individuals for some of their personal traits. It is useful at this point to fix some terminology.

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This partic- ular simplification will be retained throughout the bulk of the book, although it will soon appear that it plays little role in the construction of social crite- ria pertaining to the liberal approach to responsibility and reward. In the last chapter this issue will be examined in more detail. Moreover we will assume that individual well-being always increases with money, a rather standard assumption in Western-style economics and po- litical philosophy alike, although, after due reflection, it is probably false for a morally sophisticated notion of well-being. The case of multi-dimensional resources is tackled later on.

A fourth simplifying feature is that money is available in a given quantity that the government can distribute at will. This seems a very unrealistic assumption and it will be relaxed later on. The sets from which yi and zi are drawn, denoted Y and Z respectively, are assumed to have at least two elements. Hopefully this book will make them more familiar with the standard economic methodology which has been quite successful in producing a good understanding of redistributive issues.

The function u is assumed to be continuous and increasing in xi over X. This consid- erably simplifies the analysis. This model is very similar to the model of allocation of indivisible goods, in which y is a transferable but indivisible resource and x is a transferable and divisible good. The set S e is the subset of allocations selected by S.

This chapter and the next one will focus on allocation rules, but starting in Chapter 3 we will also be interested in social ordering functions. Two special cases will be of particular interest. The distribution case is relevant to situations in which the government has a fixed budget that can be used in order to provide targeted help to particular 2 SeeSvensson , Alkan et al.

Optimal income taxation theory and principles of fairness — New Jersey Research Community

We will not study this variant. The TU case is especially relevant to situations in which individual well-being is itself monetary. For instance, think of the idea of equalizing opportunities for income, in a case when individual labor supply is totally inelastic. Or, relatedly, think of equalizing opportunities for utility when utility depends only on disposable income and not on leisure, and when individ- uals are deemed responsible for their utility function so that the public policy disregards utilities out of neutrality toward utility functions and focuses on disposable income.

For instance, they may be responsible for their management performance or their policy but not for the tax base in their jurisdiction or the demographic characteristics of the population they take care of.

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Example 1. The degree of dedication is a personal trait that makes individuals use the quantity of money at their disposal in a more or less profitable way, in terms of well-being. Now, money is received from two sources. At the beginning of their adult lives, individuals receive a personal bequest coming from their family and at the same time are submitted to a transfer tax or grant.

aginactal.tk The combination of these two operations determines their disposable wealth, and they then pursue their life plans and obtain a certain level of well-being. For simplicity we suppose that well-being is proportional to disposable wealth and to the degree of dedication. Cappelen and Tungodden b. A related application, dealing with health insurance and risk selection, is made in Schokkaert et al. Second, it is hopefully more transparent that this variable need not elicit a moral judgment.