Social orderings and the evaluation of public policy

Abstract

A new approach to the evaluation of public policy has been proposed in the last decade. In consists of building orderings of the resource allocations based on efficiency, fairness and robustness properties. Then those orderings are maximized under the appropriate incentive compatibility constraints, in order to derive the appropriate public policy. We illustrate this approach in the case of production problems, which involves the production and cost sharing of a public good and the design of labor income taxation.