Samuelson Machines and the Optimal Public-Private Mix
AbstractStandard economic analysis assumes the sets of public and private goods to be exogenously given. Yet societies very often choose the public-private mix, using resources to convert seemingly private goods into ones with public goods characteristics and vice versa. And, in practice, we see a bewilderingly large variety of public-private mixes across societies. This papers advances an analysis of the choice of the public-private mix in the framework of voluntary contributions to public goods provision, by envisaging that, starting from a situation where all goods have private characteristics, some goods can be changed to have public goods characteristics at a cost (by purchasing a “Samuelson machine”). It characterizes the jointly optimal choice of the public-private mix and the efficient supply or not of the public goods in the mix. This characterization generates a number of testable predictions on the public-private mix, and on the prevalence of free riding.
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Bibliographic InfoPaper provided by Edinburgh School of Economics, University of Edinburgh in its series ESE Discussion Papers with number 83.
Date of creation: Mar 2004
Date of revision:
Public goods; public-private mix; Samuelson machine; cost of publicness.;
Other versions of this item:
- Simon Clark & Ravi Kanbur, 2006. "Samuelson machines and the optimal public-private mix," Economics Bulletin, AccessEcon, vol. 8(13), pages 1-11.
- Kanbur, Ravi & Clark, Simon, 2002. "Samuelson Machines and the Optimal Public-Private Mix," Working Papers, Cornell University, Department of Applied Economics and Management 127321, Cornell University, Department of Applied Economics and Management.
- D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
- D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-03-14 (All new papers)
- NEP-MIC-2004-03-14 (Microeconomics)
- NEP-PBE-2004-03-14 (Public Economics)
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