Do Government Subsidies Increase the Private Supply of Public Goods?

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Do Government Subsidies Increase the Private Supply of Public Goods?

Author Info

Ted Bergstrom (University of California, Santa Barbara)
Jim Andreoni (University of Wisconsin)

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Abstract

Can the government get people to contribute more to public goods by subsidizing voluntary contributions. In a general equilibrium model, answering this question is not a slam dunk, especially given the remarkable "neutrality theorems" in the theory of voluntary contributions. But our model yields a surprisingly decisive comparative statics result. If public goods and private goods are both normal goods, then increases in the subsidy rate necessarily increase the equilibrium supply of public goods.

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Publisher Info
Paper provided by Department of Economics, UC Santa Barbara in its series University of California at Santa Barbara, Economics Working Paper Series with number 1996A.

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Date of creation: 01 Jan 1996
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Handle: RePEc:cdl:ucsbec:1996a

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Other versions of this item:

Article
- Andreoni, James & Bergstrom, Ted, 1996. " Do Government Subsidies Increase the Private Supply of Public Goods?," Public Choice, Springer, vol. 88(3-4), pages 295-308, September.
Paper
- Andreoni, J. & Bergstrom, T., 1992. "Do Government Subsidies Increase the Private Supply of Public Goods," Papers 92-11, Michigan - Center for Research on Economic & Social Theory.
- Andreoni, J. & Bergstrom, T., 1993. "Do Government Subsidies Increase the Private Supply of Public Goods?," The Warwick Economics Research Paper Series (TWERPS) 406, University of Warwick, Department of Economics.

Cited by:
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Daniel Goulao, 2005. "Review of Privade Provided Public Goods Literature," Public Economics 0501006, EconWPA. [Downloadable!]
Villanacci, Antonio & Zenginobuz, Unal, 2004. "Pareto improving interventions in a general equilibrium model with private provision of public goods," MPRA Paper 183, University Library of Munich, Germany, revised 07 Jun 2006. [Downloadable!]
Josef Falkinger & Ernst Fehr & Simon Gaechter, . "A Simple Mechanism for the Efficient Provision of Public Goods - Experimental Evidence," IEW - Working Papers iewwp003, Institute for Empirical Research in Economics - IEW. [Downloadable!]
Other versions:
- Josef Falkinger et al., 2000. "A Simple Mechanism for the Efficient Provision of Public Goods: Experimental Evidence," American Economic Review, American Economic Association, vol. 90(1), pages 247-264, March. [Downloadable!] (restricted)
Keisuke Hattori, 2003. "Reconsideration of the Crowding-out Effect with Non-linear Contribution Technology," Economics Bulletin, Economics Bulletin, vol. 8(7), pages 1-10. [Downloadable!]
Antonio Villanacci & Ünal Zenginobuz, 2006. "Pareto improving interventions in a general equilibrium model with private provision of public goods," Review of Economic Design, Springer, vol. 10(3), pages 249-271, December. [Downloadable!] (restricted)
Andreas Lange & John A. List & Michael K. Price, 2004. "Using Tontines to Finance Public Goods: Back to the Future?," NBER Working Papers 10958, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
Josef Falkinger, 2004. "Noncooperative Support of Public Norm Enforcement in Large Societies," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]

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