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Public Provision of Private Goods and User Charges

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  • Alessandro BALESTRINO

    (Università di Pisa)

Abstract

This paper deals with the question whether uniform provision of a purely private good should be implemented at the social optimum, in a second best economy where personalised lump-sum transfers are not feasible, but no market failure exists. The answer is that it depends on the balance of private and social gains and losses from public provision: necessary conditions for the optimality of uniform provision are derived and discussed. The sensitivity of these conditions to changing rules for the choice of the user charge is also investigated, and it is suggested that public provision is most likely to be optimal when it is free of charge. Finally, it is emphasized that the assumption that a perfect substitute for the publicly provided good is not available plays a crucial role in obtaining the above results.

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File URL: http://www.jstor.org/stable/40724104
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Bibliographic Info

Paper provided by Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES) in its series Discussion Papers (REL - Recherches Economiques de Louvain) with number 1995043.

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Length: 17
Date of creation: 01 Dec 1995
Date of revision:
Handle: RePEc:ctl:louvre:1995043

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Postal: Place Montesquieu 3, 1348 Louvain-la-Neuve (Belgium)
Fax: +32 10473945
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Web page: http://www.uclouvain.be/ires
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Cited by:
  1. Thum, Claudio & Thum, Marcel, 2001. " Repeated Interaction and the Public Provision of Private Goods," Scandinavian Journal of Economics, Wiley Blackwell, vol. 103(4), pages 625-43, December.
  2. Balestrino, Alessandro, 1997. "Education policy in a non-altruistic model of intergenerational transfers with endogenous fertility," European Journal of Political Economy, Elsevier, vol. 13(1), pages 157-169, February.
  3. Balestrino, Alessandro, 1999. " User Charges as Redistributive Devices," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 1(4), pages 511-24.
  4. Ana María Iregui, . "Decentralised Provision of Quasi- Private Goods: The Case of Colombia," Borradores de Economia 203, Banco de la Republica de Colombia.
  5. Lundholm, M. & Ohlsson, H., 1995. "Wages for Women and Publicly Financed Day Care," Papers 1995-23, Uppsala - Working Paper Series.

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