On the legitimacy of coercion for the nancing of public goods
AbstractThe literature on public goods has shown that e?cient outcomes are impossible if participation constraints have to be respected. This paper addresses the question whether they should be imposed. It asks under what conditions e?ciency considerations justify that individuals are forced to pay for public goods that they do not value. It is shown that participation constraints are desirable if public goods are provided by a malevolent Leviathan. By contrast, with a Pigouvian planner, e?ciency can be achieved. Finally, the paper studies the delegation of public goods provision to a pro?t-maximizing ?rm. This also makes participation constraints desirable.
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Bibliographic InfoPaper provided by Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich in its series Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems with number 265.
Date of creation: May 2009
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Public goods; Mechanism Design; Incomplete Contracts; Regulation;
Find related papers by JEL classification:
- D02 - Microeconomics - - General - - - Institutions: Design, Formation, and Operations
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
- L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
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