Liberal Radicalism: A Flexible Design For Philanthropic Matching Funds

37 Pages Posted: 18 Sep 2018 Last revised: 31 Dec 2018

See all articles by Vitalik Buterin

Vitalik Buterin

Ethereum Foundation

Zoë Hitzig

Harvard University - Department of Economics

E. Glen Weyl

Plural Technology Collaboratory, Microsoft Research Special Projects; Plurality Institute; GETTING-Plurality Research Network

Date Written: December 2018

Abstract

We propose a design for philanthropic or publicly-funded seeding to allow (near) optimal provision of a decentralized, self-organizing ecosystem of public goods. The concept extends ideas from Quadratic Voting to a funding mechanism for endogenous community formation. Citizens make public goods contributions to projects of value to them. The amount received by the project is (proportional to) the square of the sum of the square roots of contributions received. Under the "standard model" this yields first best public goods provision. Variations can limit the cost, help protect against collusion and aid coordination. We discuss applications to campaign finance, open source software ecosystems, news media finance and urban public projects. More broadly, we relate our mechanism to political theory, discussing how this solution to the public goods problem may furnish neutral and non-authoritarian rules for society that nonetheless support collective organization.

Keywords: public goods, free rider problem, mechanism design, Quadratic Voting

JEL Classification: D47, D63, D61, D71, D26, D82, H41, K16

Suggested Citation

Buterin, Vitalik and Hitzig, Zoë and Weyl, Eric Glen, Liberal Radicalism: A Flexible Design For Philanthropic Matching Funds (December 2018). Available at SSRN: https://ssrn.com/abstract=3243656 or http://dx.doi.org/10.2139/ssrn.3243656

Vitalik Buterin

Ethereum Foundation ( email )

Zoë Hitzig

Harvard University - Department of Economics ( email )

Littauer Center
Cambridge, MA 02138
United States

Eric Glen Weyl (Contact Author)

Plural Technology Collaboratory, Microsoft Research Special Projects ( email )

11 Ellsworth Ave, #2
Cambridge, MA 02139
United States
8579984513 (Phone)

HOME PAGE: http://www.glenweyl.com

Plurality Institute ( email )

GETTING-Plurality Research Network ( email )

124 Mount Auburn Street
Suite 520N
Cambridge, MA 02138
United States

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