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Fixed Grants and the Supply of Public Goods: the Case of Agricultural Research

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  • Jyoti Khanna

    (Cleveland State University)

Abstract

This article analyzes the provision of public goods and services by state and local Abstract governments with fixed intergovernmental grants. Equilibrium conditions are derived for an activity with private and pure public joint products, funded by state funds and fixed intergovernmental grants. Fixed grants are shown to impose an additional constraint on lower level governments and induce them to supply fewer units of the public good. Also, such grants impose a cost on the grantor equal to the potential loss in spillins for each agent.

Suggested Citation

  • Jyoti Khanna, 1992. "Fixed Grants and the Supply of Public Goods: the Case of Agricultural Research," Public Finance Review, , vol. 20(2), pages 216-230, April.
    • Handle: RePEc:sae:pubfin:v:20:y:1992:i:2:p:216-230
    DOI: 10.1177/109114219202000205
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    References listed on IDEAS

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    1. Bahl, Roy W. & Sjoquist, David L., 1990. "The State and Local Fiscal Outlook: What Have We Learned and Where Are We Headed?," National Tax Journal, National Tax Association, vol. 43(3), pages 321-42, September.
    2. Andreoni, James, 1988. "Privately provided public goods in a large economy: The limits of altruism," Journal of Public Economics, Elsevier, vol. 35(1), pages 57-73, February.
    3. Bahl, Roy W. & Sjoquist, David L., 1990. "The State and Local Fiscal Outlook: What Have We Learned and Where Are We Headed?," National Tax Journal, National Tax Association;National Tax Journal, vol. 43(3), pages 321-342, September.
    4. Cornes, Richard & Sandler, Todd, 1984. "Easy Riders, Joint Production, and Public Goods," Economic Journal, Royal Economic Society, vol. 94(375), pages 580-598, September.
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