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Does the public sector over-provide club goods? A general result

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  • al-Nowaihi, Ali
  • Fraser, Clive D.

Abstract

With nondistortionary user charges, the first best and second best of a single-club-exogenous-income economy with identical individuals coincide. They differ if incomes differ. Overprovision of a superior club good then occurs in the Second Best.

Suggested Citation

  • al-Nowaihi, Ali & Fraser, Clive D., 2012. "Does the public sector over-provide club goods? A general result," Economics Letters, Elsevier, vol. 117(2), pages 397-400.
    • Handle: RePEc:eee:ecolet:v:117:y:2012:i:2:p:397-400
    DOI: 10.1016/j.econlet.2012.06.021
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    References listed on IDEAS

    as
    1. Wildasin, David E, 1984. "On Public Good Provision with Distortionary Taxation," Economic Inquiry, Western Economic Association International, vol. 22(2), pages 227-243, April.
    2. Cornes,Richard & Sandler,Todd, 1996. "The Theory of Externalities, Public Goods, and Club Goods," Cambridge Books, Cambridge University Press, number 9780521477185, September.
    3. Fraser, Clive D., 2005. "Corrigendum to "When is efficiency separable from distribution in the provision of club goods?" [Journal of Economic Theory 90 (2000) 204-221]," Journal of Economic Theory, Elsevier, vol. 125(2), pages 194-197, December.
    4. Wilson, John Douglas, 1991. "Optimal Public Good Provision with Limited Lump-Sum Taxation," American Economic Review, American Economic Association, vol. 81(1), pages 153-166, March.
    5. Clive Fraser & Ali al-Nowaihi, 2006. "Comparing the first-best and second-best provision of a club good: an example," Economics Bulletin, AccessEcon, vol. 8(4), pages 1-6.
    6. Sandler, Todd & Tschirhart, John T, 1980. "The Economic Theory of Clubs: An Evaluative Survey," Journal of Economic Literature, American Economic Association, vol. 18(4), pages 1481-1521, December.
    7. A. B. Atkinson & N. H. Stern, 1974. "Pigou, Taxation and Public Goods," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 41(1), pages 119-128.
    8. Berglas, Eitan & Pines, David, 1981. "Clubs, local public goods and transportation models : A synthesis," Journal of Public Economics, Elsevier, vol. 15(2), pages 141-162, April.
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    10. Douglas Wilson, John, 1991. "Optimal public good provision in the Ramsey tax model : A generalization," Economics Letters, Elsevier, vol. 35(1), pages 57-61, January.
    11. Fraser, Clive D., 2000. "When Is Efficiency Separable from Distribution in the Provision of Club Goods?," Journal of Economic Theory, Elsevier, vol. 90(2), pages 204-221, February.
    12. Boadway, Robin, 1980. "A note on the market provision of club goods," Journal of Public Economics, Elsevier, vol. 13(1), pages 131-137, February.
    13. repec:ebl:ecbull:v:8:y:2006:i:4:p:1-6 is not listed on IDEAS
    14. al-Nowaihi, Ali & Fraser, Clive D., 2007. "Is the public sector too large in an economy with club goods? A case when consumers differ in both tastes and incomes," Economic Modelling, Elsevier, vol. 24(6), pages 1018-1031, November.
    15. Gaube, Thomas, 2000. "When do distortionary taxes reduce the optimal supply of public goods?," Journal of Public Economics, Elsevier, vol. 76(2), pages 151-180, May.
    16. Serge-Christophe Kolm, 1974. "Qualitative Returns to Scale and the Optimum Financing of Environmental Policies," International Economic Association Series, in: Jerome Rothenberg & Ian G. Heggie (ed.), The Management of Water Quality and the Environment, chapter 5, pages 151-188, Palgrave Macmillan.
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    More about this item

    Keywords

    Clubs; First best; Second best; Distribution; Distortion;
    All these keywords.

    JEL classification:

    • D - Microeconomics
    • H1 - Public Economics - - Structure and Scope of Government
    • H4 - Public Economics - - Publicly Provided Goods

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