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State Preferences and the Provision of Public Goods

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  • Xenia Matschke

    ()
    (University of Wisconsin-Madison)

Abstract

Countries 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 Info

Article 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)
Pages: 712-718

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Handle: RePEc:jns:jbstat:v:223:y:2003:i:6:p:712-718

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Keywords: Public goods; state preferences;

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  1. Warr, Peter G., 1982. "Pareto optimal redistribution and private charity," Journal of Public Economics, Elsevier, vol. 19(1), pages 131-138, October.
  2. 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.
  3. Wellisch,Dietmar, 2000. "Theory of Public Finance in a Federal State," Cambridge Books, Cambridge University Press, number 9780521630351.
  4. Becker, Gary S, 1983. "A Theory of Competition among Pressure Groups for Political Influence," The Quarterly Journal of Economics, MIT Press, vol. 98(3), pages 371-400, August.
  5. Andreoni, James, 1989. "Giving with Impure Altruism: Applications to Charity and Ricardian Equivalence," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1447-58, December.
  6. Warr, Peter G., 1983. "The private provision of a public good is independent of the distribution of income," Economics Letters, Elsevier, vol. 13(2-3), pages 207-211.
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