Economics and Finance Faculty Publications and Presentations

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How does justice affect individual incentives and efficiency in a political economy? We show that elementary principles of distributive justice guarantee the existence of a self-enforcing contract whereby agents non-cooperatively choose their inputs and derive utility from their pay. Chief among these principles is that your pay should not depend on your name, and a more productive individual should not earn less. We generalize our analysis to incorporate inclusivity, ensuring basic pay to unproductive agents, implemented through progressive taxation and redistribution. Our findings show that without redistribution, any self-enforcing agreement may be inefficient, but a minimal level of redistribution guarantees the existence of an efficient agreement. Our model has several applications and interpretations. In addition to highlighting the structure of economies and organizations in which fairness and efficiency are compatible, we develop an application to the formation of rent-seeking political alliances under the threat of fake news.


© The Author(s) 2024. This article is distributed under the terms of the Creative Commons Attribution-NonCommercial 4.0 License ( which permits non-commercial use, reproduction and distribution of the work without further permission provided the original work is attributed as specified on the SAGE and Open Access page (

Creative Commons License

Creative Commons Attribution-NonCommercial 4.0 International License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License

Publication Title

Journal of Theoretical Politics



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Economics Commons



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