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The Mirrlees Approach to the Theory of Economic Policy

  • Robin Boadway

    ()

This paper summarizes James Mirrlees' key contribution to the theory of tax policy. It argues that the Mirrlees approach of viewing government as being constrained by imperfect information has changed profoundly how we look at the normative public policy. In this view, asymmetric information provides the limit to redistribution by restricting the efficiency-equity trade-off. It leads to consideration of other policy instruments for relaxing incentive constraints and improving the efficiency of redistributive policies. Some of these instruments include quantity controls, in-kind transfers and public provision or mandating of insurance, things we observe in practice. Copyright Kluwer Academic Publishers 1998

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File URL: http://hdl.handle.net/10.1023/A:1008668509373
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Article provided by Springer in its journal International Tax and Public Finance.

Volume (Year): 5 (1998)
Issue (Month): 1 (February)
Pages: 67-81

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Handle: RePEc:kap:itaxpf:v:5:y:1998:i:1:p:67-81
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  1. J. A. Mirrlees, 1976. "Optimal Tax Theory: A Synthesis," Working papers 176, Massachusetts Institute of Technology (MIT), Department of Economics.
  2. Guesnerie, Roger & Roberts, Kevin, 1984. "Effective Policy Tools and Quantity Controls," Econometrica, Econometric Society, vol. 52(1), pages 59-86, January.
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  21. Sheshinski, Eytan, 1972. "The Optimal Linear Income-Tax," Review of Economic Studies, Wiley Blackwell, vol. 39(3), pages 297-302, July.
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  26. Blackorby, Charles & Donaldson, David, 1988. "Cash versus Kind, Self-selection, and Efficient Transfers," American Economic Review, American Economic Association, vol. 78(4), pages 691-700, September.
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  28. Cremer, Helmuth & Gahvari, Firouz, 1997. "In-kind transfers, self-selection and optimal tax policy," European Economic Review, Elsevier, vol. 41(1), pages 97-114, January.
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