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Private Provision of Public Goods and the Failure of the Neutrality Property in Large Finite Economies

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  • Fries, Timothy L
  • Golding, Edward
  • Romano, Richard E

Abstract

The pure public goods paradigm has been criticized because it implies the implausible result that, under certain assumptions, any (small) arbitrary income redistribution will have no effect on the allocation of resources. It is shown that this particular criticism is unwarranted because, for large enough economies, the assumptions necessary for this neutrality property will hold true for a negligible small subset of the parameter space. Copyright 1991 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.

Suggested Citation

  • Fries, Timothy L & Golding, Edward & Romano, Richard E, 1991. "Private Provision of Public Goods and the Failure of the Neutrality Property in Large Finite Economies," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 32(1), pages 147-157, February.
    • Handle: RePEc:ier:iecrev:v:32:y:1991:i:1:p:147-57
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    Cited by:

    1. Dasgupta, Indraneel & Kanbur, Ravi, 2001. "Class, Community, Inequality," Working Papers 127671, Cornell University, Department of Applied Economics and Management.
    2. Gaube, Thomas, 2006. "Altruism and charitable giving in a fully replicated economy," Journal of Public Economics, Elsevier, vol. 90(8-9), pages 1649-1667, September.
    3. Fraser, Clive D., 1996. "On the provision of excludable public goods," Journal of Public Economics, Elsevier, vol. 60(1), pages 111-130, April.
    4. Dennis Epple & Richard Romano, 2003. "Collective Choice and Voluntary Provision of Public Goods," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 44(2), pages 545-572, May.
    5. Andreas Lange & John A. List & Michael K. Price, 2007. "Using Lotteries To Finance Public Goods: Theory And Experimental Evidence," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 48(3), pages 901-927, August.
    6. Deffains, Bruno & Mercier Ythier, Jean, 2010. "Optimal production of transplant care services," Journal of Public Economics, Elsevier, vol. 94(9-10), pages 638-653, October.
    7. Bruno Deffains & Jean Mercier Ythier, 2009. "Optimal production of transplant care services," Working Papers of BETA 2009-19, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    8. Gaube, Thomas, 2001. "Group size and free riding when private and public goods are gross substitutes," Economics Letters, Elsevier, vol. 70(1), pages 127-132, January.
    9. Xiaoquan (Michael) Zhang & Feng Zhu, 2011. "Group Size and Incentives to Contribute: A Natural Experiment at Chinese Wikipedia," American Economic Review, American Economic Association, vol. 101(4), pages 1601-1615, June.
    10. Huseyin Yildirim & Alvaro Name Correa, 2011. "A Theory of Charitable Fund-Raising with Costly Solicitations," Levine's Working Paper Archive 786969000000000222, David K. Levine.
    11. Gradstein, Mark, 1998. "Provision of public goods in a large economy," Economics Letters, Elsevier, vol. 61(2), pages 229-234, November.
    12. Gaube, Thomas, 2000. "Group size and free riding when private and public goods are gross substitutes," Bonn Econ Discussion Papers 13/2000, University of Bonn, Bonn Graduate School of Economics (BGSE).
    13. Epple, Dennis & Romano, Richard E, 1996. "Public Provision of Private Goods," Journal of Political Economy, University of Chicago Press, vol. 104(1), pages 57-84, February.
    14. Thomas Gaube, 2005. "Altruism and charitable giving in a fully replicated economy," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2005_8, Max Planck Institute for Research on Collective Goods.
    15. Konrad, Kai A., 1992. "The advantage of being poor: private provision of public goods, strategic incentives and the role of public provision," EconStor Research Reports 112687, ZBW - Leibniz Information Centre for Economics.
    16. R. C. Cornes & A. G. Schweinberger, 1996. "Free Riding and the Inefficiency of the Private Production of Pure Public Goods," Canadian Journal of Economics, Canadian Economics Association, vol. 29(1), pages 70-91, February.
    17. Konrad, Kai A., 1998. "Local public goods and central charities," Regional Science and Urban Economics, Elsevier, vol. 28(3), pages 345-362, May.
    18. Romano, Richard & Yildirim, Huseyin, 2001. "Why charities announce donations: a positive perspective," Journal of Public Economics, Elsevier, vol. 81(3), pages 423-447, September.

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