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Brennan and Walsh Reconsidered (Mutt and Jeff Ride Again)

Geoffrey Brennan and Cliff Walsh contrast the different transfer patterns of Pareto-optimal redistribution of income resulting from our model (American Economic Review, 1969) and from the model used by von Furstenberg and Mueller (FM). They attempt to show that our model is inconsistent and that, when corrected, would produce a similar transfer pattern to that of FM. We argue that our paper was more general than they allege and that the differences between the transfer patterns in our model and that of FM reflect differences in the concept of horizontal equity and assumptions about utility interdependence, and not any inconsistency on our part.