IDEAS home Printed from https://ideas.repec.org/p/hal/journl/halshs-00367867.html
   My bibliography  Save this paper

Walras-Lindahl-Wicksell: What equilibrium concept for public goods provision ? I - The convex case

Author

Listed:
  • Monique Florenzano

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

Abstract

Despite the large number of its references, this paper is less a survey than a systematic exposition, in an unifying framework and assuming convexity as well on the consumption side as on the production side, of the different equilibrium concepts elaborated for studying provision of public goods. As weak as possible conditions for their existence and their optimality properties are proposed. The general conclusion is that the drawbacks of the different equilibrium concepts lead to founding public economic policy either on direct Pareto improving government interventions or on state enforcement of decentralized mechanisms.

Suggested Citation

  • Monique Florenzano, 2009. "Walras-Lindahl-Wicksell: What equilibrium concept for public goods provision ? I - The convex case," Post-Print halshs-00367867, HAL.
    • Handle: RePEc:hal:journl:halshs-00367867
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00367867
    as

    Download full text from publisher

    File URL: https://shs.hal.science/halshs-00367867/document
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Groves, Theodore & Ledyard, John O, 1977. "Optimal Allocation of Public Goods: A Solution to the "Free Rider" Problem," Econometrica, Econometric Society, vol. 45(4), pages 783-809, May.
    2. Wayne Shafer & Hugo Sonnenschein, 1976. "Equilibrium with Externalities," Discussion Papers 145, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    3. Murty, Sushama, 2010. "Externalities and fundamental nonconvexities: A reconciliation of approaches to general equilibrium externality modeling and implications for decentralization," Journal of Economic Theory, Elsevier, vol. 145(1), pages 331-353, January.
    4. E. Malinvaud, 1972. "Prices for Individual Consumption, Quantity Indicators for Collective Consumption," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 39(4), pages 385-405.
    5. MONIQUE FLORENZANO & ELENA L. Del MERCATO, 2006. "Edgeworth and Lindahl–Foley equilibria of a General Equilibrium Model with Private Provision of Pure Public Goods," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 8(5), pages 713-740, December.
    6. Erik Lindahl, 1958. "Some Controversial Questions in the Theory of Taxation," International Economic Association Series, in: Richard A. Musgrave & Alan T. Peacock (ed.), Classics in the Theory of Public Finance, pages 214-232, Palgrave Macmillan.
    7. Weber, Shlomo & Wiesmeth, Hans, 1991. "The equivalence of core and cost share equilibria in an economy with a public good," Journal of Economic Theory, Elsevier, vol. 54(1), pages 180-197, June.
    8. Sontheimer, Kevin C., 1971. "An existence theorem for the second best," Journal of Economic Theory, Elsevier, vol. 3(1), pages 1-22, March.
    9. Warr, Peter G., 1983. "The private provision of a public good is independent of the distribution of income," Economics Letters, Elsevier, vol. 13(2-3), pages 207-211.
    10. Groves, Theodore & Ledyard, John O, 1980. "The Existence of Efficient and Incentive Compatible Equilibria with Public Goods," Econometrica, Econometric Society, vol. 48(6), pages 1487-1506, September.
    11. John A. Weymark, 2004. "Shared Consumption : A Technological Analysis," Annals of Economics and Statistics, GENES, issue 75-76, pages 175-195.
    12. Mas-Colell, Andreu & Silvestre, Joaquim, 1989. "Cost share equilibria: A Lindahlian approach," Journal of Economic Theory, Elsevier, vol. 47(2), pages 239-256, April.
    13. Gale, D. & Mas-Colell, A., 1979. "Corrections to an equilibrium existence theorem for a general model without ordered preferences," Journal of Mathematical Economics, Elsevier, vol. 6(3), pages 297-298, December.
    14. Shafer, Wayne J., 1976. "Equilibrium in economies without ordered preferences or free disposal," Journal of Mathematical Economics, Elsevier, vol. 3(2), pages 135-137, July.
    15. M. Ali Khan & Rajiv Vohra, 1987. "An Extension of the Second Welfare Theorem to Economies with Nonconvexities and Public Goods," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 102(2), pages 223-241.
    16. Mishan, E J, 1969. "The Relationship between Joint Products, Collective Goods, and External Effects," Journal of Political Economy, University of Chicago Press, vol. 77(3), pages 329-348, May/June.
    17. Starrett, David A., 1972. "Fundamental nonconvexities in the theory of externalities," Journal of Economic Theory, Elsevier, vol. 4(2), pages 180-199, April.
    18. Diamantaras, Dimitrios & Gilles, Robert P, 1996. "The Pure Theory of Public Goods: Efficiency, Dencentralization, and the Core," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 37(4), pages 851-860, November.
    19. Robert P. Gilles & Suzanne Scotchmer & Dimitrios Diamantaras, 1996. "Decentralization of Pareto optima in economies with public projects, nonessential private goods and convex costs (☆)," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 8(3), pages 555-564.
    20. S. Ghosal & H. M. Polemarchakis, 1999. "Exchange and optimality," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 13(3), pages 629-642.
    21. repec:adr:anecst:y:2004:i:75-76:p:09 is not listed on IDEAS
    22. John A. Weymark, 1979. "Optimality Conditions for Public and Private Goods," Public Finance Review, , vol. 7(3), pages 338-351, July.
    23. Villanacci, Antonio & Zenginobuz, E.Unal, 2005. "Existence and regularity of equilibria in a general equilibrium model with private provision of a public good," Journal of Mathematical Economics, Elsevier, vol. 41(4-5), pages 617-636, August.
    24. Milleron, Jean-Claude, 1972. "Theory of value with public goods: A survey article," Journal of Economic Theory, Elsevier, vol. 5(3), pages 419-477, December.
    25. Cornes, Richard & Sandler, Todd, 1985. "The Simple Analytics of Pure Public Good Provision," Economica, London School of Economics and Political Science, vol. 52(205), pages 103-116, February.
    26. Shafer, Wayne J, 1974. "The Nontransitive Consumer," Econometrica, Econometric Society, vol. 42(5), pages 913-919, September.
    27. Diamantaras, Dimitrios & Gilles, Robert P & Scotchmer, Suzanne, 1996. "Decentralization of Pareto Optima in Economies with Public Projects, Nonessential Private Goods and Convex Costs," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 8(3), pages 555-564, October.
    28. Bergstrom, Theodore C. & Parks, Robert P. & Rader, Trout, 1976. "Preferences which have open graphs," Journal of Mathematical Economics, Elsevier, vol. 3(3), pages 265-268, December.
    29. De Simone, Anna & Graziano, Maria Gabriella, 2004. "The pure theory of public goods: the case of many commodities," Journal of Mathematical Economics, Elsevier, vol. 40(7), pages 847-868, November.
    30. Gale, D. & Mas-Colell, A., 1975. "An equilibrium existence theorem for a general model without ordered preferences," Journal of Mathematical Economics, Elsevier, vol. 2(1), pages 9-15, March.
    31. Shafer, Wayne & Sonnenschein, Hugo, 1975. "Equilibrium in abstract economies without ordered preferences," Journal of Mathematical Economics, Elsevier, vol. 2(3), pages 345-348, December.
    32. Bergstrom, Theodore & Blume, Lawrence & Varian, Hal, 1986. "On the private provision of public goods," Journal of Public Economics, Elsevier, vol. 29(1), pages 25-49, February.
    33. Shafer, Wayne & Sonnenschein, Hugo, 1976. "Equilibrium with Externalities, Commodity Taxation, and Lump Sum Transfers," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 17(3), pages 601-611, October.
    34. Bonnisseau, Jean-Marc, 1991. "Existence of Lindahl equilibria in economies with nonconvex production sets," Journal of Economic Theory, Elsevier, vol. 54(2), pages 409-416, August.
    35. Greenberg, Joseph, 1975. "Efficiency of tax systems financing public goods in general equilibrium analysis," Journal of Economic Theory, Elsevier, vol. 11(2), pages 168-195, October.
    36. E. Malinvaud, 1971. "A Planning Approach to the Public Good Problem," Palgrave Macmillan Books, in: Peter Bohm & Allen V. Kneese (ed.), The Economics of Environment, pages 77-93, Palgrave Macmillan.
    37. Agnar Sandmo, 1973. "Public Goods and the Technology of Consumption," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 40(4), pages 517-528.
    38. Knut Wicksell, 1958. "A New Principle of Just Taxation," International Economic Association Series, in: Richard A. Musgrave & Alan T. Peacock (ed.), Classics in the Theory of Public Finance, pages 72-118, Palgrave Macmillan.
    39. Mantel, Rolf R., 1975. "General equilibrium and optimal taxes," Journal of Mathematical Economics, Elsevier, vol. 2(2), pages 187-200.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Faias, Marta & Moreno, Emma & Wooders, Myrna, 2009. "A Strategic market game approach for the private provision of public goods," MPRA Paper 37777, University Library of Munich, Germany, revised 08 Mar 2012.
    2. Marakulin, V.M., 2013. "On the Edgeworth conjecture for production economies with public goods: A contract-based approach," Journal of Mathematical Economics, Elsevier, vol. 49(3), pages 189-200.
    3. Giebe, Thomas & Schweinzer, Paul, 2014. "Consuming your way to efficiency: Public goods provision through non-distortionary tax lotteries," European Journal of Political Economy, Elsevier, vol. 36(C), pages 1-12.
    4. Monique Florenzano, 2009. "From equilibrium models to mechanism design: On the place and the role of government in the public goods provision analysis in the second part of the twentieth century," Post-Print halshs-00367859, HAL.
    5. Monique Florenzano, 2010. "Government and the provision of public goods:from equilibrium models to mechanismdesign," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 17(4), pages 1047-1077.
    6. Faias, Marta & Moreno-García, Emma & Wooders, Myrna, 2015. "On neutrality with multiple private and public goods," Mathematical Social Sciences, Elsevier, vol. 76(C), pages 103-106.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Monique Florenzano, 2009. "Walras-Lindahl-Wicksell: What equilibrium concept for public goods provision," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00531434, HAL.
    2. Monique Florenzano, 2010. "Government and the provision of public goods:from equilibrium models to mechanismdesign," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 17(4), pages 1047-1077.
    3. Monique Florenzano, 2009. "From equilibrium models to mechanism design: On the place and the role of government in the public goods provision analysis in the second part of the twentieth century," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00367859, HAL.
    4. Paul Oslington, 2012. "General Equilibrium: Theory and Evidence," The Economic Record, The Economic Society of Australia, vol. 88(282), pages 446-448, September.
    5. W D A Bryant, 2009. "General Equilibrium:Theory and Evidence," World Scientific Books, World Scientific Publishing Co. Pte. Ltd., number 6875, January.
    6. Peter J. Hammond & Antonio Villar, 1998. "Efficiency with Non‐Convexities: Extending the “Scandinavian Consensus” Approaches," Scandinavian Journal of Economics, Wiley Blackwell, vol. 100(1), pages 11-32, March.
    7. MONIQUE FLORENZANO & ELENA L. Del MERCATO, 2006. "Edgeworth and Lindahl–Foley equilibria of a General Equilibrium Model with Private Provision of Pure Public Goods," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 8(5), pages 713-740, December.
    8. Nizar Allouch, 2013. "A competitive equilibrium for a warm-glow economy," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 53(1), pages 269-282, May.
    9. Maria Graziano & Maria Romaniello, 2012. "Linear cost share equilibria and the veto power of the grand coalition," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 38(2), pages 269-303, February.
    10. Charalambos Aliprantis & Kim Border & Owen Burkinshaw, 1996. "Market economies with many commodities," Decisions in Economics and Finance, Springer;Associazione per la Matematica, vol. 19(1), pages 113-185, March.
    11. Senda Ounaies & Jean-Marc Bonnisseau & Souhail Chebbi, 2016. "Equilibrium of a production economy with noncompact attainable allocations set," Documents de travail du Centre d'Economie de la Sorbonne 16056r, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne, revised Oct 2017.
    12. M. Ali Khan & Metin Uyanik, 2021. "The Yannelis–Prabhakar theorem on upper semi-continuous selections in paracompact spaces: extensions and applications," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 71(3), pages 799-840, April.
    13. Kung, Fan-chin, 2008. "Voluntary contributions to multiple public goods in a production economy with widespread externalities," Journal of Mathematical Economics, Elsevier, vol. 44(12), pages 1364-1378, December.
    14. Gilles, Robert P. & Pesce, Marialaura & Diamantaras, Dimitrios, 2020. "The provision of collective goods through a social division of labour," Journal of Economic Behavior & Organization, Elsevier, vol. 178(C), pages 287-312.
    15. Robert M. Anderson & Haosui Duanmu & M. Ali Khan & Metin Uyanik, 2022. "Walrasian equilibrium theory with and without free-disposal: theorems and counterexamples in an infinite-agent context," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 73(2), pages 387-412, April.
    16. Wolfgang Buchholz & Wolfgang Peters, 2001. "The overprovision anomaly of private public good supply," Journal of Economics, Springer, vol. 74(1), pages 63-78, February.
    17. Monique Florenzano, 2007. "General equilibrium," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00250167, HAL.
    18. Murty, Sushama, 2010. "Externalities and fundamental nonconvexities: A reconciliation of approaches to general equilibrium externality modeling and implications for decentralization," Journal of Economic Theory, Elsevier, vol. 145(1), pages 331-353, January.
    19. Achille Basile & Robert P. Gilles & Maria Gabriella Graziano & Marialaura Pesce, 2021. "The Core of economies with collective goods and a social division of labour," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 71(3), pages 1085-1119, April.
    20. Won, Dong Chul & Yannelis, Nicholas C., 2008. "Equilibrium theory with unbounded consumption sets and non-ordered preferences: Part I. Non-satiation," Journal of Mathematical Economics, Elsevier, vol. 44(11), pages 1266-1283, December.

    More about this item

    Keywords

    Private provision equilibrium; Lindahl-Foley equilibrium; public competitive equilibrium; abstract economies; equilibrium existence; welfare theorems; core; Equilibre de provision privée; équilibre de Lindahl; équilibre compétitif public; économies abstraites; existence de l'équilibre; théorèmes du bien-être; coeur;
    All these keywords.

    JEL classification:

    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
    • D60 - Microeconomics - - Welfare Economics - - - General
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:journl:halshs-00367867. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.