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The Mirrlees Approach to the Theory of Economic Policy

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  • Robin Boadway

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Abstract

This paper summarizes James Mirrlees' key contribution to the theory of tax policy. It argues that the Mirrlees approach of viewing government as being constrained by imperfect information has changed profoundly how we look at the normative public policy. In this view, asymmetric information provides the limit to redistribution by restricting the efficiency-equity trade-off. It leads to consideration of other policy instruments for relaxing incentive constraints and improving the efficiency of redistributive policies. Some of these instruments include quantity controls, in-kind transfers and public provision or mandating of insurance, things we observe in practice. Copyright Kluwer Academic Publishers 1998

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Bibliographic Info

Article provided by Springer in its journal International Tax and Public Finance.

Volume (Year): 5 (1998)
Issue (Month): 1 (February)
Pages: 67-81

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Handle: RePEc:kap:itaxpf:v:5:y:1998:i:1:p:67-81

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Web page: http://www.springerlink.com/link.asp?id=102915

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Keywords: Mirrlees; incentive constraints; optimal policy;

References

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Cited by:
  1. J. Atsu Amegashie & Bazoumana Ouattara & Eric Strobl, 2007. "Moral Hazard and the Composition of Transfers: Theory with an Application to Foreign Aid," CESifo Working Paper Series 1996, CESifo Group Munich.
  2. Patricia Apps & Ngo Van Long & Ray Rees, 2009. "Optimal Piecewise Linear Income Taxation," CESifo Working Paper Series 2565, CESifo Group Munich.

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