Taxes or Fees? The Political Economy of Providing Excludable Public Goods
AbstractThis paper provides a positive analysis of public provision of excludable public goods financed by uniform taxes or fees. Individuals differing in preferences decide, using majority rule, the provision level and financing instrument. The decisive voter has median preferences in a tax regime, but generally has above median preferences in a fee regime. Numerical solutions indicate that populations with uniform or left-skewed distributions of preferences choose taxes, while a majority coalition of high- and low-preference individuals prefer fees when preferences are sufficiently right skewed. Public good provision and welfare under fees exceeds that under taxes in the latter case. Copyright 2005 Blackwell Publishing Inc..
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Bibliographic InfoArticle provided by Association for Public Economic Theory in its journal Journal of Public Economic Theory.
Volume (Year): 7 (2005)
Issue (Month): 3 (08)
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Web page: http://www.blackwellpublishing.com/journal.asp?ref=1097-3923
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Other versions of this item:
- Kurtis J. Swope & Eckhard Janeba, 2001. "Taxes or Fees? The Political Economy of Providing Excludable Public Goods," CESifo Working Paper Series 542, CESifo Group Munich.
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