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When Does Majority Rule Supply Public Goods Efficiently?

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Author Info
Ted Bergstrom (University of California, Santa Barbara)

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Abstract

H.R. Bowen showed that if voters have equal tax shares and if marginal rates of substitution are symmetrically distributed, then majority voting leads to efficient provision of public goods. These conditions are not likely to apply in a community with asymmetric income distribution. This paper defines a new idea for public goods allocation, a "pseudo-Lindahl equilibrium" which combines majority voting with tax rates that depend on income and other observable characteristices in such a way that the majority rule outcome is Pareto optimal for an interesting class of societies. The informational requirements for implementing pseudo-Lindahl are much less stringent than those required for an ordinary Lindahl equilibrium.

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Paper provided by Department of Economics, UC Santa Barbara in its series University of California at Santa Barbara, Economics Working Paper Series with number 1979A.

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Date of creation: 01 Feb 1979
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Handle: RePEc:cdl:ucsbec:1979a

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Related research
Keywords: majority rule; public goods; Bowen equilibrium; voting; efficiency;

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  1. Crès, Hervé & Tvede, Mich, 2006. "Portfolio diversification and internalization of production externalities through majority voting," Les Cahiers de Recherche 816, HEC Paris. [Downloadable!]
  2. Robert Inman, 2005. "Financing Cities," NBER Working Papers 11203, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  3. Dennis Epple & Richard Romano, 2000. "Collective Choice and Voluntary Provision of Public Goods," NBER Working Papers 7802, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  4. Sita Nataraj Slavov, 2006. "Public versus Private Provision of Public Goods," Occidental Economics Working Papers 2, Occidental College, Department of Economics, revised Mar 2006. [Downloadable!]
  5. Cristina Ciocirlan & Bruce Yandle, 2003. "The Political Economy of Green Taxation in OECD Countries," European Journal of Law and Economics, Springer, vol. 15(3), pages 203-218, May. [Downloadable!] (restricted)
  6. R. Renault & A. Trannoy, 1999. "Protecting minorities through voting rules," THEMA Working Papers 99-04, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise. [Downloadable!]
    Other versions:
  7. Timothy Goodspeed, 1994. "Efficiency and equity consequences of decentralized government: An application to Spain," International Tax and Public Finance, Springer, vol. 1(1), pages 35-54, February. [Downloadable!] (restricted)
  8. Theodore C. Bergstrom & Judith Roberts & Daniel L. Rubinfeld & Perry Shapiro, 1986. "The Efficiency of the Supply of Public Education," NBER Working Papers 1901, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  9. Giacomo Corneo, 2005. "Media Capture in a Democracy: The Role of Wealth Concentration," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  10. Parry, Ian, 2001. "How Large are the Welfare Costs of Tax Competition?," Discussion Papers dp-01-28, Resources For the Future. [Downloadable!]
    Other versions:
  11. Régis Renault & Alain Trannoy, 2003. "Protecting minorities through the average voting rules," IDEP Working Papers 0303, Institut d'economie publique (IDEP), Marseille, France. [Downloadable!]
    Other versions:
  12. Ted Bergstrom & Judy Roberts & Dan Rubinfeld & Perry Shapiro, 1988. "A Test for Efficiency in the Supply of Local Public Education," Papers _036, University of Michigan, Department of Economics. [Downloadable!]
  13. Portney, Paul & Oates, Wallace, 2001. "The Political Economy of Environmental Policy," Discussion Papers dp-01-55, Resources For the Future. [Downloadable!]
    Other versions:
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