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External economies of scale, government purchasing commitment and welfare improvements in the vaccines industry


  • Pedro Garcia-del-Barrio

    (Universitat Internacional de Catalunya)


Some industries exhibit external economies of scale. In these cases,the introduction of self-financing tax subsidy programmes canimprove social welfare. This paper advocates intervention incompetitive markets if economies of scale existand implementing the policy is inexpensive.

Suggested Citation

  • Pedro Garcia-del-Barrio, 2012. "External economies of scale, government purchasing commitment and welfare improvements in the vaccines industry," European Journal of Government and Economics, Europa Grande, vol. 1(2), pages 163-179, December.
  • Handle: RePEc:egr:ejge00:v:1:i:2:p:163-179

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    References listed on IDEAS

    1. Jacques Thépot, 2003. "Pareto-Improving Redistribution in a Monopoly," The Japanese Economic Review, Japanese Economic Association, vol. 54(2), pages 165-178.
    2. Masahiko Aoki, 2013. "Marshallian External Economies And Optimal Tax-Subsidy Structure," Chapters,in: Comparative Institutional Analysis, chapter 2, pages 5-17 Edward Elgar Publishing.
    3. Osana, Hiroaki, 1977. "Optimal Tax-Subsidy System for an Economy with Marshallian Externalities," Econometrica, Econometric Society, vol. 45(2), pages 329-340, March.
    4. Chandra, Vandana & Franck, David & Naqvi, Nadeem, 2002. "World Increasing Returns and Production Subsidies," Economica, London School of Economics and Political Science, vol. 69(274), pages 223-227, May.
    5. Stephen Broadberry & Andrew Marrison, 2002. "External economies of scale in the Lancashire cotton industry, 1900–1950[Without im]," Economic History Review, Economic History Society, vol. 55(1), pages 51-77, February.
    6. John S. Chipman, 1970. "External Economies of Scale and Competitive Equilibrium," The Quarterly Journal of Economics, Oxford University Press, vol. 84(3), pages 347-385.
    7. Ethier, Wilfred J, 1982. "Decreasing Costs in International Trade and Frank Graham's Argument for Protection," Econometrica, Econometric Society, vol. 50(5), pages 1243-1268, September.
    8. Panagariya, Arvind, 1981. "Variable Returns to Scale in Production and Patterns of Specialization," American Economic Review, American Economic Association, vol. 71(1), pages 221-230, March.
    9. Frank D. Graham, 1923. "Some Aspects of Protection Further Considered," The Quarterly Journal of Economics, Oxford University Press, vol. 37(2), pages 199-227.
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    1. repec:spr:ecogov:v:18:y:2017:i:3:d:10.1007_s10101-017-0190-z is not listed on IDEAS

    More about this item


    external economies of scale; social welfare; tax-subsidy; income transfer; government intervention;

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets


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