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Public Provision of Private Goods

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  • Epple, Dennis
  • Romano, Richard E

Abstract

Government may provide a good that can, if legally permitted, be supplemented by private purchases. Policy is determined by majority rule. Under standard assumptions on preferences, a majority voting equilibrium exists. A regime of positive government provision with no restriction on private supplements is shown to be majority preferred to a regime of either only market provision or only government provision. Combined public and private expenditure on the good is higher under this dual-provision regime than under either of the alternatives. Under some preference configurations, the median-income voter is pivotal; under others, a voter with income below the median is pivotal. Copyright 1996 by University of Chicago Press.

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Article provided by University of Chicago Press in its journal Journal of Political Economy.

Volume (Year): 104 (1996)
Issue (Month): 1 (February)
Pages: 57-84

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Handle: RePEc:ucp:jpolec:v:104:y:1996:i:1:p:57-84

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  1. Privatizacija PTKM – “There you go again”
    by cronomy in Cronomy on 2012-04-22 16:42:41
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