Marc Fleurbaey

Equal Opportunity or Equal Social Outcome

John Rawlss work (1971) has greatly contributed to rehabilitating equality as a basic social value, after decades of utilitarian hegemony,particularly in normative economics, but Rawls also emphasized that full equality of welfare is not an adequate goal either. This thesis was echoed in Dworkins famous twin papers on equality (Dworkin 1981a,b), and it is now widely accepted that egalitarianism must be selective. The bulk of the debate on ‘Equality of What?’ thus deals with what variables ought to be submitted for selection and how this selection ought to be carried out.

Equality and responsibility

This paper analyses the concept of responsibility and the way it appears in economic theory and in egalitarian theories of justice. It identifies two general principles (natural reward, and compensation) which inspire many arguments and axioms in theories based on responsibility. The main results obtained in models where responsibility plays a central part are summed up and presented in the light of the two principles. The main criteria put forth by philosophers who combine an egalitarian concern with the idea of personal responsibility are also mentioned, and their performance w.r.t. the two principles can be compared.

Assessing Risky Social Situations

This paper reexamines the welfare economics of risk. It singles out a class of criteria, the “expected equally distributed equivalent,” as the unique class that avoids serious drawbacks of existing approaches. Such criteria behave like ex post criteria when the final statistical distribution of well-being is known ex ante and like ex ante criteria when risk generates no inequality. The paper also provides a new result on the tension between inequality aversion and respect of individual ex ante preferences, in the vein of Harsanyi’s aggregation theorem.

Compensation and responsibility

Many distributive issues involve situations in which initial characteristics make individuals unequal. In view of prevailing moral sentiments, some of these characteristics call for compensating transfers, and some do not. We study the literature on this problem of compensation. This literature follows the distinction between the ethical principle of compensation and that of responsibility. According to the former, a good resource allocation system should neutralize the differential influence over agents’ outcomes of the characteristics that elicit compensation. According to the latter, a good resource allocation system should remain neutral with respect to inequality arising from the influence of characteristics that do not elicit compensation. The principle of responsibility can be interpreted as a libertarian principle of natural reward, or as a principle of utilitarian reward. Depending on whether the emphasis is put on the principle of compensation or of responsibility, and depending on how the latter is interpreted, there exist four main families of solutions to compensation problems. We review the axiomatic analyses of these four families of solutions in the different models in which they have been studied. We also review the applications that have been made of these solutions to problems of income taxation, education investment, social mobility and health insurance systems.Abstract Many distributive issues involve situations in which initial characteristics make individuals unequal. In view of prevailing moral sentiments, some of these characteristics call for compensating transfers, and some do not. We study the literature on this problem of compensation. This literature follows the distinction between the ethical principle of compensation and that of responsibility. According to the former, a good resource allocation system should neutralize the differential influence over agents’ outcomes of the characteristics that elicit compensation. According to the latter, a good resource allocation system should remain neutral with respect to inequality arising from the influence of characteristics that do not elicit compensation. The principle of responsibility can be interpreted as a libertarian principle of natural reward, or as a principle of utilitarian reward. Depending on whether the emphasis is put on the principle of compensation or of responsibility, and depending on how the latter is interpreted, there exist four main families of solutions to compensation problems. We review the axiomatic analyses of these four families of solutions in the different models in which they have been studied. We also review the applications that have been made of these solutions to problems of income taxation, education investment, social mobility and health insurance systems.

On fair compensation

This paper analyses the problems arising in the pure exchange fair division model, when some dimensions of the resources are personal, fixed, and cannot be redistributed. The remaining resources must then be allocated in a compensatory way. A set of desirable normative properties is defined. No-envy satisfies these properties, but is not generally non-empty in this setting and other criteria are examined, for which existence results are given. General impossibility results obtain. In particular, it is generally impossible to compensate fully and only for differential personal resources, when preferences differ.

Intertemporal equity and the extension of the Ramsey criterion

We examine social orderings applied to infinite intergenerational consumption paths. Basic dilemmas between several reasonable axioms lead to a taxonomy and characterization of different kinds of orderings, some of which are well known extensions of the Ramsey criterion. We show how filters and ultrafilters can be used to understand the general structure of these extensions and to construct orderings which meet as many axioms as possible.

Ex Ante Versus Ex Post Equality of Opportunity

We study the difference between the ex post and ex ante perspectives in equality of opportunity. We show that the well documented conflicts between compensation and reward are but an aspect of a broader conflict between ex ante and ex post perspectives. The literature that takes the goal of providing equal opportunities as the guiding principle generally considers that this is implemented only when, ex post, all individuals with the same effort obtain equal success. It is easy to believe that ex ante compensation is another natural embodiment of the same idea. We show that this is not true.

The impossibility of a Paretian egalitarian

In a one-good world, there is a nice correspondence between the Pigou-Dalton principle of transfer and social welfare dominance. In this paper we study the case of multiple goods (without using prices as a means to come back to one dimension), and show that many results of the one-dimensional setting carry over to the multidimensional case when individuals are assumed to have identical preferences. But the nice correspondence breaks down as soon as individual preferences display minimal differences, and multidimensional versions of the transfer principle clash with the Pareto principle. This analysis reveals an interesting connection with the theory of fair allocation, since multidimensional transfer principles are closely related to the no-domination criterion, a weak version of the no-envy criterion.

International Comparisons of Living Standards by Equivalent Incomes

We propose a measure of living standards for international comparisons. Based on GDP per capita, the measure incorporates corrections for international flows of income, labor, risk of unemployment, healthy life expectancy, household demography and inequalities. The method for comparing populations that differ in some non-income dimension consists of computing the equivalent variation of income that would make each population indifferent between its current situation and a reference situation with respect to the non-income dimension. This is applied to 24 OECD countries. The obtained ranking of countries differs substantially from the GDP ranking.

Equity in Health and Health Care

We discuss the conceptual foundations of measuring (in)equity in health and health care. After an overview of the recent developments in the measurement of socio-economic inequalities and in racial disparities, we show how these partial approaches can be seen as special cases of the more general social choice approach to fair allocation and equality of opportunity. We suggest that this latter framework offers many new analytical possibilities and is sufficiently rich to accommodate various ethical views. We emphasize that horizontal and vertical equity are intricately linked to each other. We then argue that a focus on overall well-being is necessary to put the partial results on health (care) inequity into a broader perspective and we discuss the pros and cons of various methods to evaluate the joint distribution of health and income: multidimensional inequality indices, dominance approaches, the use of happiness measures and finally the concept of equivalent income. Throughout the chapter the theoretical analysis is complemented with an overview of recent empirical results.We discuss the conceptual foundations of measuring (in)equity in health and health care. After an overview of the recent developments in the measurement of socioeconomic inequalities and in racial disparities, we show how these partial approaches can be seen as special cases of the more general social choice approach to fair allocation and equality of opportunity. We suggest that this latter framework offers many new analytical possibilities and is sufficiently rich to accommodate various ethical views. We emphasize that horizontal and vertical equity are intricately linked to each other. We then argue that a focus on overall well-being is necessary to put the partial results on health (care) inequity into a broader perspective, and we discuss the pros and cons of various methods to evaluate the joint distribution of health and income: multidimensional inequality indices, dominance approaches, the use of happiness measures, and finally the concept of equivalent income. Throughout the chapter the theoretical analysis is complemented with an overview of recent empirical results.