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On the neutrality of redistribution in a general equilibrium model with public goods

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  • Villanacci, Antonio
  • Zenginobuz, Unal

Abstract

Models on private provision of public goods typically involve a single private good and linear production technology for the public good. We study a model with several private goods and non-linear (strictly concave) production technology. We revisit the question of “neutrality” of government interventions on equilibrium outcomes and show that relative price effects that are absent with a single private good and linear production technology become a powerful channel of redistribution in this case. Contrary to previous results, redistributing endowments in favor of contributors is shown to be neither necessary nor sufficient for increasing the equilibrium level of public good.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 190.

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Date of creation: 05 May 2001
Date of revision: 09 Aug 2005
Handle: RePEc:pra:mprapa:190

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Keywords: public goods; private provision; neutrality results; general equilibrium;

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References

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  1. Cornes, Richard & Sandler, Todd, 2000. "Pareto-Improving Redistribution and Pure Public Goods," Staff General Research Papers 1833, Iowa State University, Department of Economics.
  2. Villanacci, Antonio & Zenginobuz, Unal, 2005. "Subscription equilibria with public production: Existence and regularity," MPRA Paper 132, University Library of Munich, Germany, revised 21 Sep 2006.
  3. Bernheim, B Douglas, 1986. "On the Voluntary and Involuntary Provision of Public Goods," American Economic Review, American Economic Association, vol. 76(4), pages 789-93, September.
  4. Andreoni, James, 1988. "Privately provided public goods in a large economy: The limits of altruism," Journal of Public Economics, Elsevier, vol. 35(1), pages 57-73, February.
  5. 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.
  6. Josef Falkinger & Johann K. Brunner, 1999. "Taxation in an economy with private provision of public goods," Review of Economic Design, Springer, vol. 4(4), pages 357-379.
  7. 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.
  8. David Cass & Alessandro Citanna, 1998. "Pareto improving financial innovation in incomplete markets," Economic Theory, Springer, vol. 11(3), pages 467-494.
  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. 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.
  11. Atsushi Kajii & Antonio Villanacci & Alessandro Citanna, 1998. "Constrained suboptimality in incomplete markets: a general approach and two applications," Economic Theory, Springer, vol. 11(3), pages 495-521.
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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. 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.
  3. Martin Gregor, 2011. "Tradeoffs of foreign assistance for the weakest-link global public goods," International Tax and Public Finance, Springer, vol. 18(2), pages 233-251, April.
  4. Villanacci, Antonio & Zenginobuz, E. Unal, 2006. "Subscription equilibria with public production: Existence and regularity," Research in Economics, Elsevier, vol. 60(4), pages 199-215, December.
  5. repec:van:wpaper:vuecon-sub-12-00008 is not listed on IDEAS
  6. 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.
  7. repec:van:wpaper:1201 is not listed on IDEAS

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