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Optimal Provision of Hicksian Public Inputs

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  • James Feehan

Abstract

A considerable portion of government spending is devoted to commodities that are not public goods but that directly affect production possibilities. Examples include public infrastructure like roads and dams; educational facilities and research projects in basic science; and some forms of information. Such commodities are public inputs. In a small open economy context, the focus of this paper is on those that are Hicksian in nature. An interesting decomposition of the beneficial impact of a Hicksian public input is developed. Then first-best and second-best optimality conditions for public inputs that are comparable to those for collective consumption goods are derived.

Suggested Citation

  • James Feehan, 1998. "Optimal Provision of Hicksian Public Inputs," Canadian Journal of Economics, Canadian Economics Association, vol. 31(3), pages 693-707, August.
    • Handle: RePEc:cje:issued:v:31:y:1998:i:3:p:693-707
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    Cited by:

    1. Anwar, Sajid, 2006. "Provision of public infrastructure, foreign investment and welfare in the presence of specialisation-based external economies," Economic Modelling, Elsevier, vol. 23(1), pages 142-156, January.
    2. Roger R. Betancourt, 2005. "Institutions, Markets, and Economic Performance: Implications for Cuba," Annual Proceedings, The Association for the Study of the Cuban Economy, vol. 15.
    3. Pedro R. D. Bom & Ben J. Heijdra & Jenny Ligthart, 2010. "Output Dynamics, Technology, and Public Investment," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1024, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    4. Carsten Colombier, 2004. "The inefficiency of firm-augmenting public input vs. The inapplicability of provision rules," Public Economics 0410003, University Library of Munich, Germany.
    5. Rioja, Felix K., 2003. "Filling potholes: macroeconomic effects of maintenance versus new investments in public infrastructure," Journal of Public Economics, Elsevier, vol. 87(9-10), pages 2281-2304, September.
    6. Anwar, Sajid, 2008. "Labour supply, foreign investment and welfare in the presence of public infrastructure," Economic Modelling, Elsevier, vol. 25(5), pages 959-967, September.
    7. Richard M. Bird, 2014. "A Better Local Business Tax: The BVT," IMFG Papers 18, University of Toronto, Institute on Municipal Finance and Governance.

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