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Welfare Improving User Charges for Publicly Provided Private Goods

  • Besley, Timothy

It is argued that free provision of publicly provided goods or services is rarely optimal. The argument is simple: if optimal lump-sum transfers are not available, then the government will wish to use all handles which provide information about the distribution of welfare. One such handle may be the usage of publicly provided goods and services. As long as this is not uniform, then it is a potentially valuable index for redistributive purposes. This is illustrated using two models--one in which usage of the publicly provided good is legislated by the government and another in which it is determined in part by the private costs of consuming public services. Copyright 1991 by The editors of the Scandinavian Journal of Economics.

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Article provided by Wiley Blackwell in its journal Scandinavian Journal of Economics.

Volume (Year): 93 (1991)
Issue (Month): 4 ()
Pages: 495-510

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Handle: RePEc:bla:scandj:v:93:y:1991:i:4:p:495-510
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