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Targeting public services through the unequal treatment of unequals

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  • Audun Langørgen

Abstract

When private goods are publicly provided, government authorities have to determine the distribution of services on recipients. In this paper, the public service provider is assumed to maximize utility defined over service supply to different target groups, given a budget constraint. The production technology is target group specific and depends on the ability of each target group to produce service outcomes. Three benchmark allocation principles are identified: equality of treatment (ET), equality of outcome (EO) and equality of marginal cost (EMC). These principles can be considered to be consistent with special cases of a public preference model, which allows for compromises between different allocation principles. The condition of technological dominance implies that there is a clear-cut equity-productivity trade-off, whereas violations of this condition may reduce the significance of the trade-off.
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Suggested Citation

  • Audun Langørgen, 2011. "Targeting public services through the unequal treatment of unequals," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 18(2), pages 193-213, April.
    • Handle: RePEc:kap:itaxpf:v:18:y:2011:i:2:p:193-213
    DOI: 10.1007/s10797-010-9152-x
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    Cited by:

    1. Audun Langørgen, 2015. "A structural approach for analyzing fiscal equalization," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 22(3), pages 376-400, June.

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    More about this item

    Keywords

    Treatment targeting; Technological dominance; Equity–productivity trade-off; Publicly provided private goods; In-kind transfers; Ability types; H42;
    All these keywords.

    JEL classification:

    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods

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