State Preferences and the Provision of Public Goods
AbstractCountries differ substantially in the emphasis on the public sector and the ratio between state consumption and provision of public goods. It seems that these differences are often not well explained by only assuming a heterogeneous population. In this paper, I take differing state preferences as given and investigate how changes in state preferences affect the provision of a public good. The provision of the public good is modelled as a two-stage game with the state and the citizens as players. I find that the Nash equilibrium provision of the public good is independent of a so-called "welfare state" parameter. In contrast, an increase in a parameter measuring the relative importance of public good provision vs. state consumption leads to an increase in the overall public good provision, while private provision declines.
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Bibliographic InfoArticle provided by Justus-Liebig University Giessen, Department of Statistics and Economics in its journal Journal of Economics and Statistics.
Volume (Year): 223 (2003)
Issue (Month): 6 (November)
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Public goods; state preferences;
Find related papers by JEL classification:
- H10 - Public Economics - - Structure and Scope of Government - - - General
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
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