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Collective Choice and Voluntary Provision of Public Goods

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  • Dennis Epple
  • Richard Romano

Abstract

Some public goods are provided entirely with private contributions, others with a mixture of public and private funding, and still others are entirely publicly funded. In order to study this variation, a model of dual provision is developed that endogenizes public and private funding. Households vote over an income tax that finances public supply of the good and on whether to permit private contributions. While permitting private contributions may lead to a reduction in total provision, a majority always favors permitting private contributions. Results are developed for small and large economies, and the relevance of nonexcludability and noncongestion are investigated. Copyright 2003 By The Economics Department Of The University Of Pennsylvania And Osaka University Institute Of Social And Economic Research Association.

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Bibliographic Info

Article provided by Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association in its journal International Economic Review.

Volume (Year): 44 (2003)
Issue (Month): 2 (05)
Pages: 545-572

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Handle: RePEc:ier:iecrev:v:44:y:2003:i:2:p:545-572

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  1. Bergstrom, Theodore & Blume, Lawrence & Varian, Hal, 1986. "On the private provision of public goods," Journal of Public Economics, Elsevier, vol. 29(1), pages 25-49, February.
  2. Gouveia, Miguel, 1997. " Majority Rule and the Public Provision of a Private Good," Public Choice, Springer, vol. 93(3-4), pages 221-44, December.
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  4. Besley, Timothy & Coate, Stephen, 1991. "Public Provision of Private Goods and the Redistribution of Income," American Economic Review, American Economic Association, vol. 81(4), pages 979-84, September.
  5. 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.
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  7. Epple, Dennis & Romer, Thomas, 1991. "Mobility and Redistribution," Journal of Political Economy, University of Chicago Press, vol. 99(4), pages 828-58, August.
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  9. Borcherding, Thomas E & Deacon, Robert T, 1972. "The Demand for the Services of Non-Federal Governments," American Economic Review, American Economic Association, vol. 62(5), pages 891-901, December.
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  14. 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 147-57, February.
  15. Gerhard Glomm & B. Ravikumar, 1998. "Opting out of publicly provided services: A majority voting result," Social Choice and Welfare, Springer, vol. 15(2), pages 187-199.
  16. Bernheim, B Douglas, 1986. "On the Voluntary and Involuntary Provision of Public Goods," American Economic Review, American Economic Association, vol. 76(4), pages 789-93, September.
  17. Scharf, Kimberley Ann, 2000. "Why are tax expenditures for giving embodied in fiscal constitutions?," Journal of Public Economics, Elsevier, vol. 75(3), pages 365-387, March.
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Citations

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Cited by:
  1. Sita Nataraj Slavov, 2006. "Public versus Private Provision of Public Goods," Occidental Economics Working Papers 2, Occidental College, Department of Economics, revised Mar 2006.
  2. Rainald Borck, 2007. "Voting, Inequality And Redistribution," Journal of Economic Surveys, Wiley Blackwell, vol. 21(1), pages 90-109, 02.
  3. de Janvry, A. & Dequiedt, V. & Sadoulet, E., 2014. "The demand for insurance against common shocks," Journal of Development Economics, Elsevier, vol. 106(C), pages 227-238.
  4. Lülfesmann, Christoph & Myers, Gordon M., 2011. "Two-tier public provision: Comparing public systems," Journal of Public Economics, Elsevier, vol. 95(11), pages 1263-1271.
  5. Aleix Calveras & Juan-José Ganuza & Gerard Llobet, 2011. "Voluntary contributions “vote out” public ones," SERIEs, Spanish Economic Association, vol. 2(3), pages 283-303, September.
  6. Andreas Lange & John List & Michael Price, 2007. "Using lotteries to finance public goods: theory and experimental evidence," Artefactual Field Experiments 00381, The Field Experiments Website.
  7. Braid, Ralph M., 2010. "Provision of a pure local public good in a spatial model with many jurisdictions," Journal of Public Economics, Elsevier, vol. 94(11-12), pages 890-897, December.
  8. Anesi, Vincent, 2008. "Incentives and prosocial behavior in democratic societies," Journal of Economic Psychology, Elsevier, vol. 29(6), pages 849-855, December.
  9. Christoph Luelfesmann, 2007. "Dual Provision of Public Policies in Democracy," Discussion Papers dp07-20, Department of Economics, Simon Fraser University.

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