Earmarking: Bundling to Signal Quality
AbstractEarmarking is a form of bundling in which government adopts a tax policy while specifying the uses of the revenue. This paper explores how bundling can enhance efficiency: it can inform the public of the quality of a program proposed, or of the quality of the agency that will be responsible for designing and implementing the program.We show that policies that appear inefficient in isolation may become justified when bundled.
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Bibliographic InfoPaper provided by University of California-Irvine, Department of Economics in its series Working Papers with number 060713.
Length: 15 pages
Date of creation: Feb 2007
Date of revision:
Earmarking; Asymmetric information; Bureaucracy; Project evaluation;
Find related papers by JEL classification:
- D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
- H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-02-24 (All new papers)
- NEP-PBE-2007-02-24 (Public Economics)
- NEP-PPM-2007-02-24 (Project, Program & Portfolio Management)
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